Vodacom Group has reported higher revenue for the first quarter, boosted by good growth in the contract segment in SA and a strong contribution from Egypt.
Group revenue for the quarter to end-June grew 10.6% to R40bn on a reported basis and by 12.7% on a normalised basis, the group said on Wednesday.
Service revenue growth accelerated to 13.8% to R32.26bn on a normalised basis, tracking favourably against the group’s medium-term target.
SA service revenue growth increased to 3%, supported by contract, while Egypt grew service revenue 43.8% in local currency. International business service revenue increased 9.7%, with normalised growth accelerating to 12.4%.
Group financial services revenue increased 18.1% to R3.9bn, supported by strong growth from the insurance business in SA, excellent growth in Egypt of 44.3% (55.1% in local currency) and a 17.4% (20.8% normalised) increase from the international business due to an improved performance in Mozambique, the group noted.
“Encouraging trends from Vodacom Group’s first-quarter performance support the confidence we communicated in May this year, when we upgraded our financial targets, signalling that the organisation is poised for stronger growth in the medium-term,” said CEO Shameel Joosub.
“These trends include strong revenue and service revenue growth in rand terms, a healthier performance trajectory by our international business, good growth in the contract segment and beyond-mobile services in SA, and another all-round excellent performance by Egypt,” he added.
Financial services remained a clear strategic priority for the group and constituted the largest component of beyond-mobile services. Including Safaricom, Vodacom now processed $460bn in mobile wallet transaction value a year, underscoring the effect and scale of this business. Joosub said this was a 14.9% increase in transaction value over the past 12 months and showed the group’s fintech leadership position in Africa.
Vodacom said it was encouraged by an announcement from the Competition Commission that it would no longer oppose its acquisition of a 30% stake in Maziv ahead of the Competition Appeal Court hearing on July 22, given expanded conditions agreed to by the merger parties.
“Should the transaction receive the requisite approval, I’m confident that it will enable us to accelerate fibre network expansion, help bridge the digital divide and contribute meaningfully to job creation in SA,” Joosub said.
Vodacom is focused on delivering on its Vision 2030 targets, which include growing its customer base to 260-million and its financial services customer base to 120-million.
“Core to this strategy will be accelerating mobile and fixed connectivity, scaling handset financing and the rollout of innovative digital and financial services in all our markets. We will also seek to expand our partnerships across Africa to power Vodacom’s growth, drive infrastructure sharing to increase rural and fibre connectivity and expand the reach of our Tech for Good solutions,” Joosub said.
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