Vodacom

South African telecommunications company Vodacom said on Tuesday that headline earnings per share (HEPS) for the 6 months ended September 2009 are expected to be between 10% and 20% lower than those for the 6 months ended September 2008.

The company said in a trading statement that notwithstanding the more difficult trading conditions, particularly in the international operations, it is encouraged by its core operating performance and expects group revenue growth of approximately 10% and earnings before interest, taxation, depreciation and amortisation (EBITDA) growth of approximately 8% for the 1st half compared with the same period last year. Despite this satisfactory operating performance, headline earnings have been affected by higher finance charges and losses on the re-measurement of financial instruments.

Furthermore, headline earnings were also impacted by the reversal of a deferred taxation asset of approximately R500-mn due to the reduced profitability of Vodacom DRC arising from weak macroeconomic trading conditions in that country. Vodacom also expects to recognise impairment losses of approximately R3.2-bn, mainly in relation to the Gateway acquisition, as a result of recent adverse changes in the economic environment, increased price competition and the resulting poorer trading trends. The main difference between basic earnings and headline earnings will be the impairment of goodwill in relation to Gateway, the group said.

Basic earnings per share (EPS) for the 1st half are expected to be between 95% and 105% lower compared to the EPS for the 6 months ended September 2008. Vodacom's interim results are expected to be released on or about Monday November 9 2009.