Vodacom sees 8.4% rise in H1 revenue

Vodacom has reported an 8.4% rise in revenue for the six months ended September 2012, to R34.43 billion, spurred on by the continued strong demand for data services and further voice penetration growth in its international operations.

However, this growth was offset by reduced mobile termination rates and on-going competitive pressures, Vodacom said.

Service revenue jumped to R29.68 billion, from R27.75 billion in the same period in 2011, with operating profit rising to R8.97 billion, from R7.3 billion. Vodacom highlighted an operating profit margin of 26.1%, from 23% before.

The group reported headline earnings per share of 396 cents, from 324 cents in 2011, and announced a 36.5% increase in interim dividend per share to 355 cents.

South Africa

South Africa’s service revenue grew 1.3% to R23.8 billion (4.0% excluding the impact of regulated cuts in mobile termination rates), supported by continued growth in voice services and 13.5% growth in data revenue, offsetting the 17.6% decline in interconnect revenue.

SA revenue growth was 3.7%, mainly due to increased sales of high-end smartphones. Voice revenue growth remained stable at 1.5% through the period, the operator said.

Data revenue increased 13.5% to R4.22 billion, contributing 17.7% to service revenue compared to 15.8% a year ago.

Data traffic grew 42.5%, Vodacom said, adding that data demand is being driven by increased penetration of data and higher usage amongst existing data customers.

The mobile operator said that active data customers increased 26.8% to 13.3 million, and an additional 1.4 million smartphones were active on its network over the year, bringing the total to 5.3 million.

International

Vodacom said it’s international operations delivered a very strong operational performance with service revenue increasing 36.5% to R5.99 billion, supported by 19.2% growth in active customers, and an outgoing traffic increase of 41.6%, reflecting the continued successful commercial execution.

Data revenue grew 140.7%, supported by 128% growth in active data customers to 4.3 million.

The international operations now contribute 20.2% to group service revenue, compared to 15.8% a year ago.

“Great set of results”

Shameel Joosub, Vodacom Group CEO said: “This was a great set of results, with improvements in the traditional voice business and strong performances in the data and International segments lifting overall revenue growth.

“We also controlled costs well, with the end result that despite aggressive competition and an inflationary cost environment, we actually managed to increase margins.”

He said that the group’s strategy of driving smartphone penetration and data usage is working well, with the number of active smartphones in South Africa growing 36% and the average amount of data used by each of those handsets up 46%.

“Across the group, only 35% of our active customer base is actively using data so we´re still very much at the beginning of this growth trend,” Joosub said.

“We increased the number of 3G base stations in the Group by more than 22% and thanks to the foundations laid over the past few years we were the first to launch LTE services in South Africa,” the chief executive said.

Outlook

Vodacom noted that the past six months had been characterised by strong competitive pressure in South Africa.

However, it added that, through the introduction of targeted promotions, it has been able to counter this pressure, drive increased usage and deliver overall revenue growth in line with guidance.

“Our guidance that we gave in May 2012 was low single digit service revenue growth, incremental EBITDA margin expansion through operational efficiencies and capital expenditure between 11% and 13% of group revenue.”

“Based on our solid performance in the first half, we are on track to deliver accordingly,” Vodacom said.

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Vodacom sees 8.4% rise in H1 revenue