Vodacom boosts revenue, profit – and adds 1.5 million subscribers in SA
Vodacom has gained 1.5 million more subscribers in South Africa in the first half of its financial year, taking it up to 35.7 million users in the country.
This is according to the group’s interim results for the six months ended September 2016.
Group revenue rose to R40.2 billion, up from R38.6 billion in the same period last year.
Operating profit was also up at R10.7 billion (from R10.2 billion prior), though profit attributable to shareholders was down slightly to R6.4 billion (from R6.5 billion previously).
The group declared a dividend of 395 cents per ordinary share, payable by 5 December 2016.
Vodacom South Africa performed well, despite the tough economic outlook, with service revenue growing 5.6% to R25.5 billion, aided by strong customer net additions and increased data demand.
Revenue grew 3.8% to R31.5 billion, impacted by a 5.2% decrease in equipment revenue as a result of lower sales volumes as consumer spending remained under pressure and the pricing of devices was impacted by the weaker performance of the rand against foreign currency.
Data revenue grew 19.5% to R9.9 billion and comprises 38.8% of service revenue up from 34.3% a year ago.
Vodacom said that 9.3 million of its data customer are now purchasing data bundles, while active 4G customers on the network increased 88.9% to 3.6 million with the average monthly data usage on smart devices increasing 14.4% to 629MB.
“This has resulted in an overall ARPU uplift of 23.7% as customers migrate from 3G to 4G and 17.9% as customers migrate from 2G to 3G,” Vodacom said.
“We added 131,000 contract customers, reduced contract customer churn to 5.1% and increased contract ARPU by 5.4% to R408,” Vodacom said.
Looking ahead, the group said that it will continue to weather short-term pressures, internationally, while continuing to invest in its network. The next big challenge is to gain access to much-needed spectrum, so that it can take on the growing public demand for data, it said.
Highlights
- Group service revenue up 5.3% and Group revenue up 4.1%;
- South Africa service revenue increased 5.6%, aided by a strong growth of 1.5 million active customers in the period;
- International operations’ service revenue grew 5.4%; impacted by customer registration processes;
- Group data revenue up 18.7%, supported by strong network investment;
- Group EBITDA grew 4.1% to R15.3 billion with margins flat at 38.1%;
- Group capital expenditure of R5.7 billion, focused on improved 3G and 4G coverage;
- Headline earnings per share (HEPS) flat at 440 cents per share. Negatively impacted by a tax adjustment in Tanzania and foreign currency impacts. Excluding these and the prior year loss from associate, HEPS grew 3.5%
Loading ...