Vodacom Group continued to perform strongly in the 2018 financial year, adding 4.5 million customers in South Africa and 2.5 million in its international operations, it said on Monday.
The JSE-listed telecommunications group, which published its annual results for the year ended March 31 2018, said it now has more than 103 million customers across its operations in Southern Africa and East Africa.
Group revenue climbed by 6.3% to R86.4 billion despite tough economic conditions in South Africa, its largest market. Normalised growth, excluding currency translation effects, was 7.8%. Group service revenue grew 3.4% to R70.6 billion (normalised: 5.1%).
Despite a tougher economic environment in South Africa, big data-led innovations contributed to robust demand for personalised bundles.
Group earnings (before interest and tax) improved by 4.4% (2.8% normalised) to R23.1 billion. Net profit increased 18.6%, boosted by the Safaricom acquisition in Kenya and by the profit from the sale of Helios Towers Tanzania. Headline earnings per share remained constant at R9.23, impacted by shares issued to acquire the Safaricom stake.
South African revenue growth accelerated to 8.1%, boosted by strong device sales. Service revenue increased 4.9% to R54.6 billion.
The group spent R11.6 billion on its networks in 2018, R8.9 billion of which was directed to South Africa.
“Despite a tougher economic environment in South Africa, big data-led innovations contributed to robust demand for personalised bundles and a 4.9% growth in service revenue,” said group CEO Shameel Joosub in notes accompanying the full-year results.
“Strong device sales, cost optimisation measures and the effective execution of our pricing transformation programme also played a major role in the sound commercial performance in our largest market.”
He described the performance as “solid”, especially given the revenue impact from reducing out-of-bundle data prices by as much as 50% in October 2017 and early-phase investments in new revenue streams, including fibre, content and financial services.
“Over the past three years, we have reduced effective voice and data prices by 36.3% and 42.5% respectively, while maintaining revenue growth,” Joosub said.
In its international operations, both Mozambique and Lesotho performed strongly. Safaricom delivered net profit growth of 14.1%, underpinned by strong growth in data and M-Pesa revenues and a 5.1% increase in customers to 29.6 million. Safaricom contributed R1.5 billion in profit for the eight months since acquisition, after deducting the amortisation of fair valued assets and before minority interest, Vodacom said.
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