Vodacom falls as consumer woes hit sales growth

JOHANNESBURG • Vodacom Group Ltd’s shares fell the most in almost eight months after the wireless carrier with the most South African customers reported slower revenue growth in its domestic market, as a sluggish economy hurt consumer spending.

South African first-half sales rose by 4.3%, compared to 7.7% last year. Overall, earnings before interest, taxes, depreciation and amortisation increased by 4.7%, while the interim dividend was increased to 3.95 rand (RM1.15) a share from 3.90 rand.

The unit of the UK’s Vodafone Group plc experienced tough conditions in South Africa, with weaker device sales largely behind the sales slowdown. The carrier has used investment in data to offset the weak environment, helping to boost customer numbers, though revenue per user fell as callers opted for cheaper packages.

A 14% fall in headline earnings per share included the impact of a 16.4 billion-rand empowerment deal agreed to earlier this year. That helped Johannesburg-based Vodacom better comply with government initiatives to increase non-white participation in the economy.

Vodacom shares fell 7.8% to 120.22 rand as of 12:35pm in Johannesburg yesterday, extending the decline for the year to 17%.

“We have invested four billion rand in South Africa in the past six months and at the same time we reduced voice and data prices which affected” growth, CEO Shameel Joosub said. “A long-awaited spectrum auction is expected in the first half of 2019 that will also weigh on spending, he said. — Bloomberg