Vodacom H1 HEPS slump 19.4%

Telecoms giant Vodacom recently released its interim results for the half-year ended September 24, showcasing a 1% increase in revenue amidst a significant 19.4% decline in headline earnings per share (HEPS). Vodacom Group CEO, Shameel Joosub, joined CNBC Africa to delve into the performance drivers and outlook for the company. Joosub highlighted the impact of currency devaluations in Egypt and Ethiopia on the financial results, emphasizing the normalization process undertaken to provide a clearer view of the operational performance. Despite challenges, Joosub remained optimistic about the growth potential in key markets such as Egypt and Ethiopia. Discussing the Egyptian market, Joosub pointed out the substantial earnings growth of over 75% which offset the currency devaluation effects. The devaluations in Egypt and Ethiopia have posed challenges, but Vodacom is strategically managing the situation with ongoing investments and price adjustments. Joosub acknowledged the hurdles faced in Ethiopia due to the currency devaluation but expressed confidence in achieving set targets with continued investment. The conversation shifted to Vodacom's thwarted acquisition plans, which Joosub believed to be a missed opportunity in expanding into the fiber market. The CEO expressed disappointment in the decision's impact on the company and the broader fiber industry in South Africa. Despite the setback, Joosub clarified that the acquisition would not have substantially altered Vodacom's competitive position but would have added a growth asset to the company's portfolio. Regarding the market's response to the dividend decrease and share price movement, Joosub attributed these fluctuations to external factors like foreign exchange variations. He urged investors to focus on the underlying business performance, which displayed robust revenue growth and EBITDA expansion in normalized terms. Looking ahead to the second half of the financial year, Joosub outlined the key focus areas, including sustained growth in Egypt and international markets, as well as improvements in markets like Mozambique and Ethiopia. The CEO remained bullish on Vodacom's growth trajectory, particularly in mobile financial services, fixed services, and cloud hosting. With a positive outlook for the future, Vodacom aims to navigate the challenges posed by currency fluctuations and market dynamics, leveraging strategic investments and operational enhancements to drive growth and shareholder value.