Vodacom sees 19% profit bump, strong income growth outside of SA

Vodacom waarsku dat die mark baie mededingend is.
Vodacom waarsku dat die mark baie mededingend is.

Vodacom [JSE: VOD] reported a 3% increase in revenue for the six months to end-September, with headline earnings per share up 18.9% compared to the same period last year.

The large earnings increase was due in part to the lower base last year, when its profit was hit by once-off costs related to a BEE transaction.

Vodacom now has 115m customers, with growth of 2.7m customers in Safaricom. Vodacom bought a stake in Safaricom, Kenya’s largest mobile operator, two years ago.

In South Africa, it added 691 000 customers.

Vodacom reported that its revenue from contract customers in South Africa declined 2.5%, while average revenue per client fell 10.5%. Prepaid customer revenue declined 2.1% as a result of the 60% decline in out-of-bundle data revenue.

But Vodacom said that it saw an increase in data usage in recent months after a decline in South Africa service revenue in the first three month of its financial year. More than one million people have now made video-on-demand purchases.

International operations saw service revenue growth of 15.5%  “in a period characterised by macro and political stability and high demand for data and M-Pesa services”, Vodacom said. M-Pesa facilitates cellphone-based money transfer and loan services.

M-Pesa customers in markets outside of South Africa now process more than $2.8 billion (R41bn) a month in transactions through the service.

Vodacom declared an interim dividend of 380c per share. It share price was down more than 4% by late-morning trading on Monday.

South Africa remains the core of the group, generating 80% of revenue, said Old Mutual Private Client Securities' Tasneem Samodien in a response to the results.

"With aggressive capital expenditure over the past two years, Vodacom will maintain its network leadership in this key market. The group’s investment into big data analytics, digitising the customer experience and concerted efforts to develop a superior customer experience continue to advance Vodacom’s dominance in the sector."

ZAR/USD
16.83
(+0.36)
ZAR/GBP
21.23
(+0.57)
ZAR/EUR
19.00
(+0.99)
ZAR/AUD
11.72
(+0.85)
ZAR/JPY
0.16
(+0.45)
Gold
1802.68
(-0.29)
Silver
18.64
(-0.18)
Platinum
835.00
(-1.41)
Brent Crude
43.32
(+0.49)
Palladium
1939.00
(+1.81)
All Share
55787.90
(-0.15)
Top 40
51536.91
(-0.04)
Financial 15
10339.64
(+0.63)
Industrial 25
77428.31
(-0.10)
Resource 10
52587.29
(-0.39)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1873 votes
I am taking a hit, but should be able to recover in the next year
23% - 2456 votes
My finances have been devastated
34% - 3652 votes
It's still too early to know what the full effect will be
25% - 2629 votes
Vote