Vodacom Group has reported a 4.5 percent increase in revenue to ZAR 42.0 billion in the first half-year ending 30 September compared with ZAR 40.15 billion in the same period in 2016.
The group added 4.3 million customers during the first half, 2.9 million in South Africa and 1.4 million in its international operations, to reach just over 71 million customers, up 11.8 percent. Group EBIT decreased 0.2 percent and the group EBIT margin decreased by 1.2 percentage points to 25.8 percent.
Net profit increased 7.0 percent to ZAR 6.71 billion compared with ZAR 6.27 billion in 2016, boosted by the Safaricom acquisition. Capital expenditure was ZAR 5.4 billion, representing 12.8 percent of revenue and headline earnings per share (HEPS) up 1.1 percent to ZAR 4.45 per share.
In international operations, the group said it normalised growth trends. Tanzania is delivering its turnaround strategy, accelerating revenue and customer growth, while Mozambique and Lesotho have executed a number of commercial actions, driving strong growth momentum.
In the DRC, economic weakness and decoupling of the Congolese Franc from the US dollar has hit consumer spending. Exchange rate volatility continues to dent reported growth in International operations.
Vodacom’s International operations added 1.4 million customers in the first half, reaching 31.1 million, up 11.4 percent. Service revenue declined by 4.8 percent to ZAR 8.3 billion in the first half; normalised for currency translation effects, growth was 5.5 percent. Service revenue growth was further underpinned by strong normalised growth in both data and M-Pesa revenue. Data revenue declined by 2.7 percent, with normalised growth of 6.6 percent, supported by an increase of 1.8 million data customers, to 14.8 million, up 23.3 percent. All markets grew by more than 20 percent, apart from the DRC.
In addition to increasing data network speeds and improving data coverage, the group said it retained a strong focus on providing customers with access to better, low-cost smart devices, by promoting Vodacom-branded devices. This is enabling higher smartphone penetration in all its markets, it said.
Data revenue comprised 13.6 percent (2017: 13.4%) of International operations’ service revenue. It continues to focus on improving data monetisation in all markets as demand grows rapidly. M-Pesa revenue grew by 14.0 percent, with normalised growth of 27.2 percent. M-Pesa added 1.1 million customers in the first half of the year, reaching 14.8 million.
The new M-Pesa platform with enhanced technology has significantly improved stability, resulting in increased trust with customers, and 70.9 percent more transactions processed through the system. There has also been a steady uptake of its International Money Transfer services. EBIT increased 18.6 percent (2.2%) to ZAR 988 million, while the EBIT margin expanded by 2.3 percentage points to 11.5 percent.