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JOHANNESBURG, Nov 11 (Reuters) - South African mobile operator Vodacom on Monday reported an 18.9% rise in half-year profits, partly reflecting the absence of one-off costs related to a share scheme offered to black investors.
After initially rising, Vodacom’s shares fell over 2% despite the improved result, with revenue flat in South Africa and growth in overall group service revenue slowing.
“Our international portfolio remains a star performer, growing service revenue by 15.5% in a period characterised by macro and political stability and high demand for data,” CEO Shameel Joosub said in a statement.
A stagnant economy at home has left many South African firms, Vodacom included, relying on businesses elsewhere to bolster earnings.
Even with a turnaround in the second quarter, Vodacom said service revenue in South Africa rose just 0.3% for the six months to Sept. 30 while its overall group service revenue rose 4.2% versus 6.1% a year earlier.
Headline earnings per share (HEPS), the main profit measure in South Africa, rose to 460 from 387 cents a year earlier.
The company, majority owned by Britain’s Vodafone, has been trying to raise data usage by cutting prices, and diversify its revenue by offering other services such as insurance and on-demand video, steps it said were paying off.
Vodacom now reaches a combined 115 million customers group-wide, with Safaricom, Kenya’s largest mobile operator which Vodacom partly owns, alone adding 2.7 million customers.
Safaricom runs the popular mobile financial services platform M-Pesa which provided a boost in the first half of the year.
Vodacom and Safaricom are planning to expand M-Pesa internationally after acquiring the intellectual property rights for it from Vodafone, a move that will also save both money on royalty fees.
The company’s mid-year earnings last year were hit by 1.5 billion rand in costs related to a black economic empowerment transaction.
$1 = 14.8839 rand Reporting by Emma Rumney; editing by Clarence Fernandez and Jason Neely