JOHANNESBURG – Vodacom on Monday posted a 3.9 percent jump in revenue to R44.4 billion in the six months to September as its international operations made significant gains to maintain the group’s strong balance sheet.
The South African telecoms giant said the hike was driven by a 4.2 percent increase in group service revenue to R36bn as it added 5.4 million customers during the period under review.
Group chief executive Shameel Joosub said Vodacom added 2.7m customers in South Africa and 2.7m in Safaricom during the period, to serve a combined 115m customers across the group.
Joosub said the group declared a 60cents a share special dividend during the period on the strong performance from its international portfolio as well as 380c in gross interim dividend from 390c in 2018.
Headline earnings rose 18.9 percent to 460c a share.
“Our international portfolio remains a star performer, growing service revenue by 15.5 percent in a period characterised by macro and political stability and high demand for data and M-Pesa services in each operation,” Joosub said, adding that the M-Pesa platform processed more than $2.8bn (R41.53bn) transactions a month during the period under review.
“Initiatives to further expand the M-Pesa ecosystem contributed to the 797 000 increase in customers, up to 14.3 million. Our strategic investment in Safaricom continues to perform in line with our expectations having reported strong interim results at the beginning of November.”
M-Pesa is Africa’s most successful mobile phone-based money transfer system popular in countries such as Afghanistan.
Joosub said Vodacom’s home market of South Africa now boasted 43.9m customers after 691 000 joined the network during the period.
He said service revenue grew a modest 0.3 percent in South Africa, supported by the turnaround to growth in the second quarter.
Joosub said that the reduction in out-of-bundle revenue was offset by improved data elasticity and the completion of the full "onboarding" of Telkom, the new roaming partner.
He said the key focus in South Africa remained on the policy and regulatory environment.
Ofentse Dazela, a director for Pricing Research at Africa Analysis said the Vodacom share price had fallen yesterday on worrying numbers reported by the group for the local operation. Dazela citied the 2.5 percent decline in revenue from contract customers and the 10.5 percent decline in post-paid average revenue per user .
“The Key Performance Indicators relating to Vodacom South Africa highlights the challenges besetting the local operation, which remains a major revenue driver for the group, hence the share price was adversely moved by these results,” Dazela said.
Old Mutual Private Client Securities analyst on Vodacom, Tasneem Samodien, said that a South African turnaround was on the horizon for the group.
“Reduced data pricing attracted 192 000 additional contract customers during the period, however, it drove an 8.1percent reduction in the average revenue per contract user, driving mobile contract revenue down 2.5 percent to R9.8bn,” Samodien said.
Vodacom shares closed 0.36 percent lower at R134.51 on the JSE on Monday.