Vodacom Group is a leading African mobile communications company that operates in over 40 countries.
Vodacom Group reported a 4.1 percent increase to ZAR 40.15 billion in its revenue for the first six months ended 30 September compared to ZAR 38.55 billion in the same period in 2015. The group said its revenue grew slower during the period due to equipment revenue declining by 4.9 percent. Group service revenue increased 5.3 percent to ZAR 33.97 billion from ZAR 32.24 billion in 2015, underpinned by net active customer additions of 2.3 million and data revenue growth of 18.7 percent.
Data revenue contributed 35.4 percent of Group service revenue compared to 31.4 percent a year ago. Overall growth was impacted by the slowdown of customer acquisitions as a result of customer registration requirements. Group EBITDA increased 4.1 percent to ZAR 15.28 billion, with the EBITDA margin flat at 38.1 percent. Growth was negatively impacted by a ZAR 251 million foreign exchange loss of ZAR7 million loss in 2015, and the net profit declined to ZAR 6.27 billion from ZAR 6.45 billion in 2015.
In the International operations, service revenue grew 5.4 percent supported by increased voice and the continued take-up of data services. EBITDA declined 2.2 percent, with the EBITDA margin contracting 2.2 ppts to 26.0 percent. The overall strong operational performance for the six months was negatively impacted by a one-off adjustment in taxation for Tanzania (14cps) as well as the impact from weaker local market foreign currency, Vodacom said. The impact of weaker foreign currency rates was most notable in the remeasurement of the intergroup loan to Mozambique (12cps) where the average USD/MZM rate has devalued 64.8 percent compared to the prior year.
The company’s capital expenditure decreased by 8.2 percent to ZAR 5.71 billion, representing 14.2 percent of revenue. Vodacom said it witnessed encouraging net additions to its active customer base in the second quarter while M-Pesa revenue achieved stellar growth of 36.8 percent. There are now 10.9 million customers using M-Pesa in international operations.
The group maintained its targets of low to mid single-digit service revenue growth, mid to high single-digit EBITDA growth and capital expenditure of 12-14 percent of revenue in the medium term. These targets are for an average, over the next three years and are on a normalised basis, excluding spectrum purchases and any merger and acquisition activity. This assumes broadly stable currencies and stable macro and regulatory environments.
Source: Telecom Paper