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Johannesburg - In its preliminary results for the year ended 31 March 2014, Vodacom posted a 2.8% rise in full-year earnings after bagging more subscribers across its African operations.
The group's full year service revenue in South Africa returned to growth during this period.
Headline earnings per share of 896c, up 2.8%, was impacted by R310m, including staff component, non-cash charge resulting from the modification of the terms of our Broad-based black economic empowerment (‘BBBEE’) scheme.
During the financial year Vodacom has made R10 779m in capital investments across the group supporting a 27.0% increase in outgoing voice traffic and increase in data usage of over 94%.
Group data revenue grew 32.7%, driven by bundle sales and integrated price plans.
Group earnings before interest, taxes, depreciation, and amortisation (Ebitda) is up 8.2% with a margin of 36.1%.
Free cash flows grew 8.6% despite significant network expansion and investment in working capital.
Vodacom, which also has operations in Tanzania, Democratic Republic of Congo, Lesotho and Mozambique, said diluted headline earnings per share totalled 894.4 cents in the year to end March, from 870.2c a year ago.
It declared a lower than expected 825c per share dividend.
Mobile data key
Vodacom Group CEO Shameel Joosub said Vodacom again performed well this year with good results from its international operations and South Africa returning to growth.
"Demand for mobile data continues to be a key growth driver. Overall revenue grew 8.3% and we added 7.0 million customers in the year taking our total active customer base to 57.5 million," he said.
"We continue to take major steps to reduce the cost to communicate, bringing down both our prepaid average effective price per minute by 23.6% to 55c and our average effective price per megabyte of data by 24.8% in the year."
Data traffic in South Africa increased 80.4% in comparison to last year.
The number of smartphones and tablets on the network increased 23.5% to 7.8 million, with average monthly data usage at 253MB and 743MB respectively.
International operations
Service revenue from Vodacom's international operations grew by 23.4% and the active customer base increased 21.8% to 26.0 million.
Ebitda grew by 55.4% with the 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.
Mobile financial services are also a strong growth driver with M-Pesa now contributing 18.8% to service revenue in Tanzania.
Looking forward
"Network investment is the key to continued sustainable reductions in the cost to communicate," said Joosub.
"In South Africa we invested R6.9bn in our network, adding 1 081 new 3G sites. Our 3G network now covers 91.9% of the population."
Vodacom invested a further R3.9bn in its international operations’ networks, increasing the number of 2G sites by 25.5% and 3G sites by more than 53.4%.
"Looking forward, we intend to increase capital investment by around 20% to approximately R13bn in the new financial year as part of our massive investment programme," he said.
Neotel deal
Vodacom Group has reached an agreement to buy unlisted telecoms firm Neotel for R7bn, it said on Monday.
Neotel, majority-owned by India's Tata Communications, is South Africa's second-biggest fixed-line phone operator.
The deal would give Vodacom, a unit of Britain's Vodafone, a large fibre optic network for high-speed Internet and create a telecoms company with annual revenue of more than R5bn.
Vodacom, which also reported a slight increase in annual profit on Monday, said it would fund the acquisition through available cash resources and existing credit facilities.
Vodacom said the main benefits of the Neotel transaction include the latter's fixed telecommunications network of over 15 000km of fibre-optic cable, the acceleration of Vodacom's unified communications strategy
Neotel will become a subsidiary of Vodacom SA and the combination with Vodacom’s South African fixed enterprise business will create a national service provider with annual revenues of more than R5bn.
Vodacom also said the deal will enhance its next generation network capabilities in South Africa.
The combined entity will also be able to use the radio spectrum currently assigned to Neotel more effectively.
The deal will bring about in-market consolidation with substantial cost and capex savings, according to Vodacom.
Vodacom will fund the acquisition through available cash resources and existing credit facilities.
The transaction remains subject to the fulfilment of a number of conditions, including applicable regulatory approvals and is expected to close before the end of the financial year.
“Through the combination of these two businesses, the provision of a wider range of business services and much needed consumer services like fibre-to-the-business and fibre-to-the-home becomes a concrete reality – it will be good for the consumer, good for business and good for the country," said Joosub.
"And for our investors, the transaction fits perfectly within the priorities of Vodacom’s growth strategy focused on continuing our investment in data and our enterprise business.”
The group's full year service revenue in South Africa returned to growth during this period.
Headline earnings per share of 896c, up 2.8%, was impacted by R310m, including staff component, non-cash charge resulting from the modification of the terms of our Broad-based black economic empowerment (‘BBBEE’) scheme.
During the financial year Vodacom has made R10 779m in capital investments across the group supporting a 27.0% increase in outgoing voice traffic and increase in data usage of over 94%.
Group data revenue grew 32.7%, driven by bundle sales and integrated price plans.
Group earnings before interest, taxes, depreciation, and amortisation (Ebitda) is up 8.2% with a margin of 36.1%.
Free cash flows grew 8.6% despite significant network expansion and investment in working capital.
Vodacom, which also has operations in Tanzania, Democratic Republic of Congo, Lesotho and Mozambique, said diluted headline earnings per share totalled 894.4 cents in the year to end March, from 870.2c a year ago.
It declared a lower than expected 825c per share dividend.
Mobile data key
Vodacom Group CEO Shameel Joosub said Vodacom again performed well this year with good results from its international operations and South Africa returning to growth.
"Demand for mobile data continues to be a key growth driver. Overall revenue grew 8.3% and we added 7.0 million customers in the year taking our total active customer base to 57.5 million," he said.
"We continue to take major steps to reduce the cost to communicate, bringing down both our prepaid average effective price per minute by 23.6% to 55c and our average effective price per megabyte of data by 24.8% in the year."
Data traffic in South Africa increased 80.4% in comparison to last year.
The number of smartphones and tablets on the network increased 23.5% to 7.8 million, with average monthly data usage at 253MB and 743MB respectively.
International operations
Service revenue from Vodacom's international operations grew by 23.4% and the active customer base increased 21.8% to 26.0 million.
Ebitda grew by 55.4% with the 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.
Mobile financial services are also a strong growth driver with M-Pesa now contributing 18.8% to service revenue in Tanzania.
Looking forward
"Network investment is the key to continued sustainable reductions in the cost to communicate," said Joosub.
"In South Africa we invested R6.9bn in our network, adding 1 081 new 3G sites. Our 3G network now covers 91.9% of the population."
Vodacom invested a further R3.9bn in its international operations’ networks, increasing the number of 2G sites by 25.5% and 3G sites by more than 53.4%.
"Looking forward, we intend to increase capital investment by around 20% to approximately R13bn in the new financial year as part of our massive investment programme," he said.
Neotel deal
Vodacom Group has reached an agreement to buy unlisted telecoms firm Neotel for R7bn, it said on Monday.
Neotel, majority-owned by India's Tata Communications, is South Africa's second-biggest fixed-line phone operator.
The deal would give Vodacom, a unit of Britain's Vodafone, a large fibre optic network for high-speed Internet and create a telecoms company with annual revenue of more than R5bn.
Vodacom, which also reported a slight increase in annual profit on Monday, said it would fund the acquisition through available cash resources and existing credit facilities.
Vodacom said the main benefits of the Neotel transaction include the latter's fixed telecommunications network of over 15 000km of fibre-optic cable, the acceleration of Vodacom's unified communications strategy
Neotel will become a subsidiary of Vodacom SA and the combination with Vodacom’s South African fixed enterprise business will create a national service provider with annual revenues of more than R5bn.
Vodacom also said the deal will enhance its next generation network capabilities in South Africa.
The combined entity will also be able to use the radio spectrum currently assigned to Neotel more effectively.
The deal will bring about in-market consolidation with substantial cost and capex savings, according to Vodacom.
Vodacom will fund the acquisition through available cash resources and existing credit facilities.
The transaction remains subject to the fulfilment of a number of conditions, including applicable regulatory approvals and is expected to close before the end of the financial year.
“Through the combination of these two businesses, the provision of a wider range of business services and much needed consumer services like fibre-to-the-business and fibre-to-the-home becomes a concrete reality – it will be good for the consumer, good for business and good for the country," said Joosub.
"And for our investors, the transaction fits perfectly within the priorities of Vodacom’s growth strategy focused on continuing our investment in data and our enterprise business.”
