Telkom tapping in on Vodacom
Vodacom will release full details of its performance this coming Monday morning, along with the results of Telkom. But, the operator put out the key highlights sooner, in conjunction with other 50% shareholder, Vodafone, releasing its results in London on Tuesday morning.
This is the first reporting period that Vodacom is equally owned by both Telkom and Vodafone, after the latter increased its stake from 35% to 50% recently.
But, buying Telkom shares is the only way that local shareholders can get any exposure to Vodacom.
Telkom said in a recent trading update that it expected to report headline earnings growth of between 30% and 40% a share.
Nitel shortlist
Analysts will no doubt also hope to hear more about Telkom’s international expansion plans, after the recent news from the Nigerian Bureau of Public Enterprises that it was on a short-list with seven other operators to buy state-owned operator Nitel.
Telkom had previously pulled out of this privatisation process, which the Nigerian government later abandoned. It subsequently went back to the drawing board and has secured a greater amount of investor interest.
Analysts will also want to know about Vodacom’s expansion prospects. The shareholders agreement in place with Vodafone is restrictive, and as a result, Vodacom is widely acknowledged to have been held back and been left behind by rival MTN.
The latter has expanded into a number of new territories, and recently announced the purchase of Investcom, which will add countries like Syria, Sudan, Afghanistan, Ghana and many others to its portfolio of operations.
Although it is South Africa’s biggest operator, Vodacom has fewer overall subscribers than rival MTN, as a result of the latter’s extensive African expansion, most significantly in Nigeria.
Customer figures
Vodacom said customers had increased by 51.9% to 23.5 million at the end of its financial year to March.
This compares to the 24.2 million subscribers that MTN reported having at the end of March (in a quarterly update; MTN’s full-year ends in December). Roughly 58% of these were from MTN’s international operations, with 10.2 million being in South Africa.
Vodacom reported EBITDA (earnings before interest, tax, depreciation and amortisation) of R11.8bn, a 23.1% increase, off the back of R34bn in revenue, a 24.6% increase for the 2006 year compared to last.
This gives Vodacom an EBITDA margin of 34.7%, which is slightly higher than the first half margin of 34.6%, but a little lower than last year’s 35.1%.
Vodacom said it had generated R11.1bn in cash from operations, up 10.8%, and had increased the dividend pay-out to shareholders by 32.4% to R4.5bn. Vodacom paid out R3.4bn in dividends in 2005.
Source: Fin24
Loading ...