Solid performance and continued growth are the main messages from Vodacom’s latest results.
South African revenue is up, and International operations have also shown double-digit growth, now accounting for 22.9% of Group revenue.
Strategy paying off
Vodacom Group CEO Shameel Joosub commented: ‘I am very pleased with our performance this year, with strong execution of our strategy delivering solid results.
‘The acceleration in network investment over the past two years is a true success story of effective capital investment to ensure growth in revenue and customers. The demand for data continues to be our key driver. Overall revenue grew 7.5% with a slight decline in customers to 61.3 million, as a result of customer registration requirements in our International operations.’
Network superiority is key
‘In South Africa, our network superiority has played a significant part in offering better value to our 34.2 million customers, 2.1 million up from last year.
‘We spent R8.7 billion to upgrade our network infrastructure which includes more than doubling our LTE/4G sites to over 6 000. This enabled us to increase LTE/4G coverage across South Africa to 58% (from 35%) to satisfy exceptional growth in demand for data. Affordability of devices and data bundles led to a 46.8% increase in data traffic as data bundle sales jumped 85.9%.
‘Our personalised ‘Just 4 You’ offers, part of our wider pricing transformation strategy, assisted in improved voice revenue trends, while at the same time reducing effective price per minute by 16.9%.
Our International operations grew strongly with service revenue up by 16.2% compared to 10.0% growth in 2015. This was achieved in an environment of heightened security regulations where unregistered customers of all operators were suspended. Service revenue from International operations accounted for 26.6% of the Group equivalent. Notably, Lesotho exceeded R1 billion in revenue for the first time,’ said Joosub.
‘Looking ahead, we will continue to explore spectrum opportunities,’ he continued. South Africa is falling behind on broadband roll out and access. Due to the country's dependency on mobile data, it is key to secure access to spectrum to unlock this growth potential and fulfil the growing data demands of the population.
‘The proposed acquisition of Neotel lapsed in March due to regulatory complexities and certain conditions not being fulfilled. Our ambitions to increase the rollout of fibre-based broadband services to homes and businesses remain. We will also continue to drive our customer experience and network advantage by investing heavily in resources and infrastructure.
‘As was the case a year ago, we remain cautiously optimistic while being fully cognisant of the various changing regulatory and macroeconomic environments.’
Group revenue up 7.5% (6.0%*) and Group service revenue up 7.4% (5.8%*).
South Africa revenue increased 5.2%.
- International operations revenue grew 16.6% (9.4%*); representing 22.9% of Group revenue.
- Group data revenue up 28.5%, supported by strong network investment
- Group EBITDA grew 12.8% (10.2%*) to R30 345 million with a 1.8 ppts margin expansion to 37.9%.
- Group capital expenditure of R12 875 million, focused on rapidly expanding LTE/4G coverage and increasing data speeds.
- Headline earnings per share (‘HEPS’) up 2.7% to 883 cents per share, negatively impacted by remeasurement of foreign currency denominated intergroup loans and one-off BEE charges.
- Final dividend per share of 400 cents, taking the total dividend to 795 cents per share for the year.
* Normalised growth adjusted for trading foreign exchange gains/losses and at a constant currency (using current year as base), (collectively ‘foreign exchange’).