Vodacom shares boosted by Q1 update
Shares in Vodacom advanced more than 2% in afternoon trade on the JSE, dragging rival MTN along with it as investors took a favourable view to the formers trading update for the quarter ended June 2012, announced on Thursday (19 July).
By 15:00, shares in Vodacom gained R1.87, or 2.08%, to R91.91 on the JSE, while MTN picked upR3.00 or 2.06% to R148.50. Telkom, meanwhile, was unchanged at R18.00.
The All Share Index added 0.65% to 34,256.
Vodacom reported a 29.2% rise in customers in a trading statement for the quarter ended June 2012, hitting the 50 million mark.
Group revenue improved 9.3% to R17.02 billion, from R15.57 billion in 2011, but only up 0.9% on a quarterly basis. South African revenue was up 3.5% to R14 billion, and International revenue advanced as much as 46.2% to R3.097 billion year on year.
Group service revenue growth was up 8.7% to R14.74 billion. South Africa’s service revenue grew 1.8% to R11.769 billion. Excluding the impact of the cuts in MTRs service revenue growth was 4.6%, a 0.6 percentage point deterioration compared to the growth rate experienced in the previous quarter. This reflects the slowdown in data revenue growth, Vodacom said.
“Overall this was a good quarter with a particularly strong performance from our International operations supporting group service revenue growth of 8.7%. The connectivity revolution is well underway with close to 16 million customers actively using data, up 43% from the prior year,” said CEO Pieter Uys.
A dealer at PSG Konsult said that investors were pleased with Vodacom’s results.
“Vodacom’s share has taken a bit of a knock in recent sessions (slipping from R98.50 on 10 July), and these results appear to have sparked some buying in the market.” He said that both MTN and Vodacom offered attractive returns for investors, while Telkom remains a less attractive option in the sector.
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