JSE-listed Vodacom, SA's largest operator by subscriber numbers, says both headline and earnings per share will be higher in the full year.
In a trading update issued this morning, before the market opened, the group says this is due to "strong underlying core operating performance" and the removal of secondary tax on companies when dividends were paid.
Last April, National Treasury implemented a withholding tax on dividend payouts, which lessens companies' tax burden, and passes the tax on the payout to shareholders, although firms withhold and pay over the amount.
Vodacom spent R806 million on dividend tax in the previous financial year. It adds that its tax for the year to March was also favourably impacted by the recognition of an additional deferred tax asset in Mozambique.
Basic earnings per share for the year should be between 25% and 30% higher, while headline earnings per share are expected to come in between 20% and 25% higher. Analysts view headline earnings per share as a key indicator of company performance as the measure strips out unusual and once-off items.
Last year, Vodacom reported service revenue up 7.8%, to R58 billion, while total revenue moved from R61.2 billion to R67 billion. Headline earnings per share gained 8.1%, to 709c, and basic earnings per share improved 23.7%, to 694c.
However, Vodacom says its 2012 earnings per share were affected by impairment charges of R199 million relating to Gateway.
Vodacom sold its investments, supplier agreements and assets in Gateway Carrier Services for $35 million at the end of August last year. It says the profit on disposal of $30 million (R223 million) had a favourable impact on earnings per share for the year to March.
Its results should be published on 20 May.
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