Vodacom cuts dividend as it ramps up network spend
Net profit increased 18.6%, boosted by the Safaricom acquisition in Kenya and by the profit from the sale of Helios Towers Tanzania.
"We added 7.0 million customers during the year - 4.5 million in South Africa, and 2.5 million in our worldwide operations", said CEO Shameel Joosub.
"This has been an extraordinary year for Vodacom", Shameel Joosub, Vodacom Group CEO said.
On Monday it said its earnings for the year to March 31 were weighed down by shares issued to acquire the Safaricom stake, but the one-time effect had now been absorbed.
However, South Africa's biggest mobile phone operator said full-year revenue rose 6.3 percent to 86.37 billion rand ($7 billion), as it added more customers and sold more smartphones in its domestic market.
Seven-million customers were added to Vodacom's network - 4.5-million in South Africa and 2.5-million in the global operations.
Safaricom contributed R1.5 billion profit for the eight months since acquisition, after deducting the amortisation of fair valued assets and before minority interest.
On the investment side, Vodacom said it put in R11.6 billion to expand its coverage and improve network quality - with R8.9 billion of that spent in South Africa.
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Headline earnings per share, the main profit measure in South Africa that strips out certain one-off items, was 923 cents, unchanged from a year earlier and falling short of analysts' estimate of 927 cents. The group declared a final dividend per share of 425c, which saw the total dividend for the year drop by 1.8% to 815cps, compared to 830cps last year.
Data traffic growth remains robust at 43,7%, enabled through growing our data network coverage and capacity as well as focussing our device strategy on increasing 3G and 4G device uptake. "In combination, we now reach over 103 million customers across the group", stated the results.
Customers using bundles have grown 13.9% to 18.7 million.
Revenue from mobile money has become a significant contributor to the group, Vodacom said. M-Pesa now has 32.3 million customers.
"Improved in-bundle usage has helped us to reduce the overall effective price per megabyte by 21.6% this year".
Enterprise service revenue grew 10,8% now contributing 25,7% of service revenue.
Worldwide operations continue to improve with normalised service revenue growth of 7,4% or 0,3% on a reported basis.
"Data monetisation remains a key focus area in all markets as demand grows rapidly", the group says. Looking ahead, he sees "renewed economic and political stability in South Africa" after President Cyril Ramaphosa ousted Jacob Zuma in February. Stability in foreign exchange and macroeconomic environments benefits our operations and is expected to support more predictable results across our operations.
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