Vodacom Group hiked its interim dividend by 9.2% to R4.15/share (R3.80 previously) on strong headline earnings growth in the first half of its 2021 financial year and a dividend receipt from Kenya’s Safaricom.
Headline earnings per share rose by 15.7%, helped by a once-off deferred tax rate adjustment of R705-million thanks to a cut in corporate income tax in Kenya.
Group revenue climbed 7.8% to R47.8-billion, underpinned by service revenue growth of 7%. South African service revenue grew 7.1%, driven by an acceleration in customer service revenue in the second quarter, Vodacom said in a statement to shareholders.
The Vodacom Group board’s dividend policy is to pay at least 90% of adjusted headline earnings, which excludes the contribution of the attributable net profit or loss from Safaricom and any associated intangible amortisation. In addition, the group intends to distribute any dividend it receives from Safaricom, up to a maximum amount of the dividend received, net of withholding tax.
The group added 4.1 million customers in the six-month period, to serve a combined 120 million customers, including Safaricom. Total financial services customers, also including Safaricom, rose 13.9% to 54.8 million.
Vodacom spent more on its network in the six-month period, too, with R5-billion going into infrastructure in South Africa. The uptick was needed to cope with “sharp increases” in data traffic and shifting customer behaviour patterns during the Covid-19 pandemic.
“In South Africa, data usage surged 86%, as connectivity demands changed with a need to work, entertain and educate from home, and as we made substantial reductions in monthly data bundle tariffs,” said group CEO Shameel Joosub.
“Also, the launch of ConnectU, which provides zero-rated access to a wide range of websites, including jobs portals and online learning platforms and discounted offers for poor communities, supported higher usage,” he said. ConnectU was created as part of a settlement agreement with the Competition Commission following the regulator’s inquiry into the mobile data services market last year. — © 2020 NewsCentral Media
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