Strong Vodacom performance, with a profit of R27.6 billion during lockdown

South Africa’s largest mobile operator, Vodacom, has announced its latest annual results, showing an exceptional performance over the last year.

Revenue increased by 8.3% to R98.3 billion, supported by service revenue growth of 5.8% to R77.6 billion.

This was bolstered by service revenue in South Africa, which climbed 7.0% to R56.4 billion.

Vodacom said this increase was driven by higher customer data usage, Vodacom’s successful ShakeUp summer promotion, and demand for financial services.

Service revenue in its international markets was muted at 1.6% in the year, due to the significant impact of the COVID-19 pandemic.

“This performance was characterised by disruption to our commercial activities as a result of the informal structure of the economies in which we operate,” said Vodacom CEO Shameel Joosub.

The factors impacting the company include currency volatility, increased pressure on consumer spend, free M-Pesa P2P transactions, and the impact of service barring in Tanzania due to biometric registration compliance.

Despite the effect on its international operations, Vodacom posted an operating profit of R27.6 billion, a 0.2% decrease from the previous year.

South Africa accounted for the largest chunk of this profit – R20.5 billion.

Overall, the Group’s net profit climbed from R16.6 billion to just over R17 billion – an increase of 2.6%.

EBITDA increased from R37.6 from the year ended March 2020 to R39.3 billion for the year ended March 2021.

Headline earnings per share increased from 945 cents per share to 980 cents, while the dividend per share dropped from 845 cents to 825 cents.

The Vodacom Group now boasts a combined 123.7 million customers, 8.2 million of which were added over the last year.

Joosub said the company invested heavily in the resilience of its networks to cope with significant increases in mobile data traffic volumes in 2020.

“We invested R13.3 billion in network infrastructure during the year, including R10.1 billion in South Africa, and as a Group we have invested R62.4 billion into our networks over the past five years,” Joosub said.

“In South Africa, the allocation of temporary spectrum has supported network capacity and highlights the urgent need for high demand spectrum to be allocated through ICASA’s ITA process.”

“We continue to see the assignment of high demand spectrum as instrumental to data pricing,” he said.

Joosub added that Vodacom was excited about its partnership with Alipay and the imminent launch of its single lifestyle app – VodaPay – in South Africa.

“Our super-app will offer services ranging from loans and savings, seamless QR and person-to-person payments, to entertainment and personalised shopping experiences, promoting greater financial inclusion,” Joosub said.

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Strong Vodacom performance, with a profit of R27.6 billion during lockdown