Vodacom reaping big rewards from a company it is fighting to control

Vodacom’s half-year headline profit jumped 26% as the company battles to keep control of Safaricom, which boosted the wireless carrier’s earnings during the period. 

Vodacom’s so-called headline earnings per share — which exclude one-time gains — climbed to R5.87 for the six months ended 30 September, from R4.67 a year earlier. 

The firm declared an interim dividend of R3.55, 7.6% higher than a year earlier. Customers increased 12% to a record 250 million.

The Johannesburg-based company that’s majority-owned by the UK’s Vodafone Group booked a fair-value gain after it remeasured its stake in East Africa’s biggest telecommunications firm. 

The increase follows Vodacom’s move to take control of Safaricom after it completed the purchase of an additional 20% interest in June, lifting its effective stake in the Kenyan company to 55%. 

That holding is now subject to a legal battle in the country, with the High Court last month declaring the government’s sale of a 15% holding to Vodacom unconstitutional and ordering the shares returned to the state.

An appeals court has since allowed Vodacom to retain the shares while fast-tracking an appeal of the ruling.