Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

South Africa's Vodacom reinstates medium-term targets after "solid" H1

11/16/2020 | 09:52am EST
A branch  South African mobile communications provider Vodacom in Cape Town

JOHANNESBURG (Reuters) - South African mobile operator Vodacom Group reinstated its medium-term targets on Monday on expectations of an improving economic outlook but nudged its operating profit forecast lower with customer finances likely to remain strained.

The firm, which is majority owned by Britain's Vodafone, postponed issuing medium-term forecasts in May due to the uncertain outlook as the effects of the coronavirus pandemic unfolded.

Echoing comments from its parent company, it said demand for its services had been relatively resilient in the first half of its financial year.

Vodacom benefited from strong demand for voice, data and financial services during the coronavirus lockdown as people were forced to work, school and entertain themselves from home.

It forecast a mid-single digit operating profit growth, anticipating the work-from-home trend would normalise and the economic fallout from the pandemic would continue to cap disposable income.

"Our medium-term target for operating profit is lower than the mid-high single digit growth that we set at our interim results last year," group chief financial officer Raisibe Morathi told analysts.

In constant currency, the operator expects operating profit growth for the 2021 financial year to trend below its medium-term target level. However, it expects ongoing rand weakness to provide an uplift.

Chief Executive Shameel Joosub said considering the magnitude of challenges arising from the pandemic in the past six months, it was particularly pleasing that the company recorded a "solid financial performance".

Service revenue for the six months ended Sept.30 grew by 7%, pushing overall group revenue up 7.8% to 47.8 billion rand ($3.09 billion).

The company also declared an interim dividend of 415 cents per share, up 9.2%, supported by headline earnings per share growth of 15.7% and the Safaricom dividend. Vodacom partly owns the Kenyan mobile operator.

Joosub said the group was monitoring the conflict in Ethiopia, where a consortium led by Safaricom has bid for a telecom licence.

"We're not sure whether some of the developments will cause delays or not," he said, adding that the auction is expected to happen in February or March next year.

($1 = 15.4586 rand)

(Reporting by Nqobile Dludla; Editing by Jacqueline Wong and Kirsten Donovan)

By Nqobile Dludla

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
NEDBANK GROUP LIMITED 0.63% 125.69 End-of-day quote.-2.93%
SAFARICOM PLC -0.55% 36.35 End-of-day quote.6.13%
VODACOM GROUP LIMITED -0.65% 123.19 End-of-day quote.-0.96%
VODAFONE GROUP PLC -0.66% 126.38 Delayed Quote.5.19%
Latest news "Economy & Forex"
01/19Trump orders assessment of security risks of Chinese made drones in U.S. government fleet
01/19British firms call for immediate $10.3 billion in COVID aid
11:59pWhite house confirms trump lifts travel restrictions on eu, uk, brazil effective jan. 26 - statement
11:59pWhite House confirms Trump lifting EU, Brazil travel restrictions Jan. 26
11:56pCENTRAL BANK OF TRINIDAD AND TOBAGO : Career Opportunity - Auditor II
11:50pRemarks by Paschal Donohoe following the Eurogroup video conference of 18 January 2021
11:50pARMS EXPORTS CONTROL : Council establishes a EU approach on end-user certificates
11:47pParler partially reappears with support from Russian technology firm
11:47pJapan's nikkei average futures up 0.64% in early trade
11:42pCENTRAL PEOPLE GOVERNMENT OF PEOPLE RE : RCEP to take effect by end of this year
Latest news "Economy & Forex"