Headline EPS declined 5.5 percent to ZAR 4.15, mainly the result of termination rate cuts in South Africa, as well as increased depreciation as a result of accelerated capital investments. EBITDA declined 1.7 percent to ZAR 12.99 billion, and the EBITDA margin contracted 1.4 percent points to 34.6 percent. Capital expenditure rose 21.3 percent from a year ago to ZAR 5.88 billion.
The company said it expects conditions to remain challenging in the short-term, particularly in South Africa where the continued impact of lower mobile termination rates, constrained consumer spend, and intense competitive pressure are all factors. In the international markets, particularly Tanzania and the DRC, continued pricing pressure is also likely to have an impact. However, Vodacom said positive trends in the adoption of smart devices and data usage will help to offset this, as will the ongoing focus on reducing operating expenditure.
In South Africa, first-half revenue grew by 0.1 percent to ZAR 30.17 billion, as continued growth in handset sales offset a 1.3 percent fall in service revenues. EBITDA fell 5.1 percent from a year earlier to ZAR 10.84 billion. At the International operations, service revenue grew 13.0 percent to ZAR 7.37 billion, and EBITDA increased 21.1 percent to ZAR 2.19 billion.