Vodacom reports 19.4% drop in earnings following Ethiopia losses

South Africa’s biggest telecoms operator Vodacom VODJ.J, majority owned by Britain’s Vodafone VOD.L, reported a 19.4% drop in half-year earnings, hurtby start-up losses in Ethiopia and foreign currency depreciation.

Vodacomlaunched Safaricom Ethiopia last year with a consortium led by Kenya’s Safaricom, which is part-owned by the South African company and Vodafone, betting that the populous nation will power growth after about five years of investment.

The group said in a statement that Safaricom’s profit was stunted by Ethiopian operations which were “impacted by currency reforms in the period.” The business, however, reacheda 6.1 million customer base, up 47.1% year-over-year, reflecting strongcommercial momentum.

Headline earnings per share, a profit measure, fell to 353 cents in the six months ended on Sept. 30, from 438 cents a year earlier.

Group service revenue declined 1.2% to 58.6 billion rand ($3.33 billion) due to currency headwinds, however, on a normalised basis it grew 9.9%.

The board declared an interim dividend per share of 285 cents. Reuters