16 May 2018

Tanzania: Vodacom to Pay Shareholders Half of Profit As Dividend

SHAREHOLDERS of Vodacom aims to share half of its 2017 profit with shareholders as it posts performance results that exceed projected profitability and operating free cash flow targets.

The mobile phone firm announced its aim to declare a dividend of 50 per cent of earnings after tax. This would make it approximately 41/- per share. In November 2017, a gross final dividend of 28.5bn/-, equivalent to 12.74/- per share of 60 per cent of net profit after tax was paid to shareholders in respect of the financial year ended 31 March 2017.

"The Board will recommend a final dividend, in relation to the financial year ended 31 march 2018, for approval by shareholders at the annual general meeting. The Board's recommendation will be in accordance with the dividend policy to pay out at least 50 per cent earnings after tax, subject to the factors stated below," financial statement of the company reads in part.

Vodacom Tanzania, majority owned by South Africa's Vodacom Group, said in a statement that, Earnings before interest, tax, depreciation and amortization (EBITDA) rose to Tshs 252.6 billion ($117 million) in the year through March, as new, cheaper smartphones helped drive a 35 percent jump in revenue from mobile data to 141.6 billion shillings.

Vodacom controls has around a 32 percent market share of the country's 40 million mobile subscribers. Other major players include Tigo Tanzania, a subsidiary of Sweden's Millicom and a local unit of India's Bharti Airtel .

Vodacom's $213 million initial public offering last August was Tanzania's largest ever IPO and attracted more than 40,000 local investors, most of whom were first-time participants in the country's stock market. Foreigners, initially banned from participating, bought 40 per cent of the shares.

The IPO was part of a government directive that mobile phone companies must float at least a 25 percent stake on the Dar es Salaam Stock Exchange (DSE). Vodacom is the only telecom company so far in Tanzania to list on the DSE.

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