Vodacom has reported a 1.5% rise in group revenue for the June quarter, with service revenue rising 10%, which is above the group’s medium-term target, helped by a strong performance from Egypt.
Group revenue grew 1.5% to R36.2bn, as the group battled foreign exchange rate headwinds, while group service revenue increased 10.0% to R28.96bn on a normalised basis, Vodacom said in a statement on Wednesday.
Egypt remained a star performer having grown service revenue at 43.7% in local currency and financial services revenue by 87%. With service revenue of R6.4bnm Egypt now accounts for 21.9% of the group’s total, ending the quarter with 47.4-million customers, up 6.1%.
SA delivered a resilient 1.8% increase in service revenue, supported by an improved prepaid performance. Supported by additional data allocations and good growth in smart devices, data traffic grew 31.3%, while beyond mobile services increased by 6.3%, contributing R2.6bn to SA service revenue of R15.3bn.
The group invested R1.9bn in the quarter and expects to invest about R11.5bn of capital expenditure in the current financial year.
Tanzania and the Democratic Republic of Congo (DRC) were significant contributors to the 5.7% growth in the international business.
International service revenue increased 2.3%, supported by excellent growth in Tanzania.
Group financial services revenue increased 8.7% to R3.3bn. A total of $400.2bn was transacted through its mobile money platforms, including Safaricom, over the past 12 months.
Group financial services revenue of R3.3bn was supported by rapid local currency growth in Egypt, and strong growth in SA within the group’s insurance and Airtime Advance segments.
“Our super-apps VodaPay, Vodafone Cash and M-Pesa are key to furthering our financial services ambitions as they integrate our own products and services with the best offerings from our partners,” said CEO Shameel Joosub.
Joosub said financial services was a clear strategic priority for the group and remained the largest component of beyond mobile services.
“We now process $400bn in mobile wallet transaction value annually, highlighting the scale of this business. I was particularly pleased with the growth of M-Pesa services that aim to deepen financial inclusion, such as loans, savings, international money transfer and merchant services,” he said.
Service revenue from its beyond mobile services — previously categorised as new services and including digital and financial services, fixed and IoT — contributed R6bn in the quarter, which equates to 20.8% of the group total, and is on track to reach its target contribution of 25%-30% over the medium term.
During the first quarter, Vodacom celebrated its 30th birthday, having signed up its first customer on June 1 1994 when it switched on its network in SA.
The group now serves more than 200-million customers across DRC, Ethiopia, Egypt, Kenya, Lesotho, Mozambique, SA and Tanzania.
The group said it would continue to drive access to smartphones, financial services, healthcare and education across its markets, while unlocking growth in critical sectors such as agriculture and energy.
“While we are mindful of an evolving macroeconomic environment across our footprint, including foreign exchange rate risk, the group is well positioned to capitalise on opportunities once the global economy shifts from its current cautious optimism to sustainable growth,” Joosub said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.