Vodacom, SA's largest cellular operator, says it had a solid operating performance in the year to March.
However, basic and headline earnings have been affected by an effective tax rate of 36%, which is mostly due to the secondary tax on companies (STC) that is paid on dividends.
At its last reporting period, for the six months to September, Vodacom paid out almost all of its free operating cash flow to shareholders in the form of dividends. The operator paid out R3.8 billion in dividends after increasing its shareholder payout 44.4%, to 260c.
In the first half of last year, it paid out 180c a share as a dividend, and 280c at year-end.
In a trading statement released yesterday, Vodacom said earnings before interest, tax, depreciation and amortisation gained about 10%.
Basic and headline earnings were negatively impacted by an effective tax rate of 36% mostly because of STC on higher dividends, the movement in net deferred tax assets derecognised, and higher depreciation and amortisation from higher capital expenditure including non-cash capital additions.
Headline earnings per share for the year should be between 5% and 10% higher than the previous year's 656c a share. Basic earnings per share are expected to be between 20% and 25% higher than last year's 561c a share.
Vodacom's share closed slightly lower yesterday, losing 49c or 0.46% to end at R107.
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