Vodacom lifts revenue by 9.4%

Vodacom reported on Monday (21 May) a 9.4% rise in revenue to R66.93 billion for the year ended March 2012, from R61.197 billion before.

The group lifted operating profit to R16.617 billion, from R 13.696 billion in 2011, while headline earnings per share improved 8.1% to 709 cents.

The mobile operator said that customers increased 29.9% to 47.8 million, adding 11.0 million.

Group service revenue was up 7.8% to R58.245 billion, while group EBITDA grew 10.5% to R22.763 billion.

Group capex increased 37.3% to R8.662 billion.

Vodacom improved its total dividend per share by 54.3% to 710 cents.

The group reported a 55.4% increase in active smartphones on the network to
5.1 million.

South Africa delivered a strong performance with service revenue growing 4.4% to R48.427 billion.

Customers increased 26.5% year on year to 28.9 million, a net increase of 6.1 million, mainly due to a 31.3% increase in prepaid customers driven by low cost handset deals in the retail channels, and refocusing of their distribution channel to better reach under-serviced areas.

International operations delivered a strong operational performance with service revenue increasing 27.5% to R10.143 billion due to customer growth, increased uptake of data services and improved pricing environments.

Customers increased 35.5% year on year to 18.9 million, adding 4.9 million in the year – driven by competitive pricing, improved distribution and extra site coverage.

Pieter Uys, Vodacom Group CEO commented: “Our first year of trading as the new red Vodacom has been a big success. Our customer base has expanded 30% to 48 million, we’ve invested R8.7 billion in our networks and we’ve achieved the number one net promoter score in South Africa and in two out of our three measured international markets,” he said.

“From a financial perspective, thanks to building the top line and also managing costs, EBITDA is up 11% and HEPS is up 8%.”

“Perhaps, more importantly, we’ve seen strong delivery in the areas driving growth into the future – data and the International businesses. Combined, these accounted for 87% of the growth in Group service revenue,” he continued.

“We added 5 million active data customers, taking the total to 15 million and supporting data revenue growth of 27%. The International customer base has now reached 19 million, an increase of 36%, and this segment has passed the important milestone of generating positive free cash flow.”

Looking forward, Vodacom said it expects competition to intensify, particularly in the data business, and consumers to remain under pressure from rising food and fuel prices. Active data customers increased 35.4% to 12.2 million.

“Despite these pressures, we believe that continued improvements in our customer proposition, data demand, and continued momentum in our International operations will support growth. We also expect to deliver further operational efficiencies,” Vodacom said.

Over the medium-term, Vodacom said it would target low single-digit service revenue growth and steady incremental EBITDA margin improvement (excluding foreign exchange movements).

“We expect to maintain our group capital expenditure between 11% and 13% of revenue for the year ending 31 March 2013. Our capital expenditure programme will support our continued customer demand for data services. We will focus on transmission, radio access renewal and accelerating the rollout of mobile broadband coverage,” it concluded.

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Vodacom lifts revenue by 9.4%