Vodacom Profits Up but by Less Than Revenues
Published on: 19th May 2014
By: Ian Mansfield
South Africa based Vodacom has reported its full year financial results and announced that revenues rose, as did profits, albeit more modestly.
Revenue was up by 8.3 percent to R62 billion (USD6 billion), while net profit rose by 3.3 percent to R13.7 billion (USD1.3 billion). The company added 7 million customers during the year, taking its total base to 57.5 million.
In South Africa, service revenue grew 0.3%, an improvement on last year's contraction. Excluding lower mobile termination rates (MTRs), service revenue grew 3.0%. The active customer base increased 8.0% to 31.5 million.
Service revenue from International operations grew by 23.4% (18.4%) and the active customer base increased 21.8% to 26 million.
EBITDA grew by 55.4% with margin expanding by 6.0 percentage points to 29.6%. Data revenue more than doubled and the number of active data customers increased 86.4% to 7.7 million, driven by data bundles.
Mobile financial services are also a strong growth driver with M-Pesa now contributing 18.8% to service revenue in Tanzania.
Looking ahead, the company said that it will be increasing capital investment over the medium term to between 14% and 17% of Group revenue, although that it partially conditional on the outcome of MTR cuts in South Africa.
The company is 65% owned by Vodafone.