Vodacom grows earnings, subscribers

Mobile service operator Vodacom has reported an 8.1% rise in headline earnings per share to 709 cents for the year ended March 2012 from 656 cents a year ago.

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

Customers increased 29.9% to 47.8 million adding 11.0 million, while there was also a 48.6% increase in group active data customers to 15.1 million.

In South Africa, demand for data services remains high, with Vodacom reporting a 35.4% rise in active data customers increased to 12.2 million. There was also a 55.4% increase in active smartphones on the network to 5.1 million. The group reported data revenue growth of 23.6% to R7.639 billion.

In its international division, service revenue was up 27.5% and EBITDA grew 73.9%.

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

He added that there had been 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.

“We added five 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.

“Overall, the team delivered a very solid performance and the platforms for growth are well established. The 24% growth in Group free cash flow supported a higher dividend of 710 cents and helped us deliver a 45% total shareholder return,” Uys noted.

Looking to the year ahead Vodacom expects competition to intensify, particularly in the data business, and consumers to remain under pressure from rising food and fuel prices.

“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. Over the medium-term, we are targeting low single digit service revenue growth and steady incremental EBITDA margin improvement (excluding foreign exchange movements),” he said.

“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,” he concluded.

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Vodacom grows earnings, subscribers