Vodacom profit hit by Ethiopia losses but Egypt lifts revenue

South African telecoms operator Vodacom's (VODJ.J) earnings took a hit in the first half from start-up losses in Ethiopia but revenue growth benefited from the inclusion of Vodafone Egypt, which prevented further profit decline.

The company, the biggest telecoms operator in South Africa which is majority-owned by Britain's Vodafone Group (VOD.L), bought a 55% stake in the Egyptian arm of Vodafone for about 43.6 billion rand ($2.3 billion) in 2021, the largest deal in the telecoms operator's history.

The business was consolidated from Dec. 8, 2022.

Vodacom launched Safaricom Ethiopia last year with a consortium led by Kenya's Safaricom, which is part-owned by the South African company and Vodafone, betting that the populous nation will power growth after about five years of investment.

Group Chief Financial Officer Raisibe Morathi told reporters that the Ethiopian business was expected to break even in year four, with peak earnings before interest, tax, depreciation and amortization losses expected in this fiscal year ended March.