Vodacom on Monday published its preliminary results for the year ended 2019, showing a 5% increase in group service revenue to R74.2 billion, while group revenue increased 4.3% to R90.1 billion.
The group reported a slight increase in operating profit to R24.5 billion, up 1.1%, with operations outside of South Africa now contributing 23% to operating profit, up from 14% in the previous year.
South African service revenue increased 2.1% to R55.7 billion, the operator said, adding 1.5 million new customers to its South African network over the period, to 43.2 million.
Headline earnings per share declined to 868 cents per share, from 923 cents previously, while Vodacom delivered a dividend per share of 795 cents, from 815 cents in the prior year.
Vodacom South Africa
Vodacom South Africa now boasts 43.2 million customers, with service revenue growing 2.1% despite the implementation of deliberate pricing transformation and a low economic growth environment, the group said.
EBITDA declined 1.3% to R27.7 billion, while the EBITDA margin of 38.9% contracted by 1.2 percentage points partially as a result of the roaming agreement with Rain.
Customer revenue increased 1.3% to R47.4 billion, while contract customer revenue increased by 0.6% with contract customers increasing 8.9% to 5.8 million.
Prepaid customer revenue increased by 2.%. Prepaid customer net additions were 1.1 million with ARPU declining by 6.9%,
“ARPU declines are as a direct result of new additions being attracted at a lower spend. Our efforts to reduce the one-off use of SIMs in the market are showing signs of success, ” Vodacom said.
Data revenue grew 3.9% to R24.3 billion, contributing 43.5% to service revenue. The effective price per MB has reduced 23.3% following the implementation of the EUSSC regulations in March, as well as a further out-of-bundle rate reduction of 50%.
Overall data usage drivers were encouraging, said Vodacom Group CEO, Shameel Joosub.
“Data traffic was up 35.6%. Active smart devices on the network were up 7.6% to 19.9 million, of which 10 million are 4G devices. Average usage on these smart devices has improved 23.2% to 966MB.”
Looking ahead, Joosub said the group continues to make good progress in key strategic pillars. “We expect the solid momentum from our digital services platforms to continue.
“Further, the strategic partnerships being formed by our Enterprise business will strengthen our IoT offers and Enterprise propositions, ultimately to the benefit of consumers.
“The commercialisation of our recently-launched payment gateway and digital wallet will assist in sustaining Financial Services growth in South Africa.”