Group says its resilient operational response is due to ‘focused execution of our strategy’
03 February 2025 - 08:09
UPDATED 03 February 2025 - 19:41
byJacqueline Mackenzie and Mudiwa Gavaza
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Vodacom Group CEO Shameel Joosub. Picture: BUSINESS DAY/FREDDY MAVUNDA
Shares in Vodacom rose as much as 8.6%as the telecom group reported higher revenue for the three months to end-December, with Egypt remaining a star performer for the group.
Group revenue rose 1.6% to R39.5bn, due to a stronger rand, and by 12.6% on a normalised basis, which represents performance on a comparable basis and adjusts for foreign currency fluctuation on a constant currency basis and excludes the effect of mergers and acquisitions and disposal activities.
Service revenue growth accelerated to 11.6% on a normalised basis, above the group’s medium-term target, but was down 1.4% on a reported basis, it said in a statement on Monday.
SA grew revenue by 4.7% to R23.86bn, with service revenue growth improving to 3.2%, supported by prepaid.
This picture helped to drive up market sentiment on Monday, with Vodacom shares up to R119.31 at their peak in morning trade. The stock pared some of those gains, closing5.68% firmer at R116.11.
The JSE’s largest mobile operator by market capitalisation, at R241bn, has seen its share price increase by more than 24% over the past year.
Vodacom, traditionally the safe investor bet for the sector, has become exposed to some of the same volatility as MTN since taking over Vodafone’s operations in Egypt. The Egyptian pound has lost about 40% against the dollar over the past year, taking a toll on Vodacom’s earnings.
Underlying performance
But the group remains positive about the unit’s underlying performance, which is strong.
Egypt’s revenue, at R7.77bn, was up 54.9% on normalised basis, but down 7.5% on a reported basis. The Egyptian business grew service revenue 44.3% in local currency, with financial services revenue also up.
Sector rival MTN’s share price was flat on the day at R115, while Telkom gained 1.07% to R33.89.
International service revenue increased 1.4% to R7.8bn, and by 7% on a normalised basis, affected by rand strength and pressure in Mozambique.
Group financial services revenue increased 5.7% to R3.6bn and the group transacted $437.7bn through its mobile money platforms, including Safaricom, over the past 12 months.
“Key trends from Vodacom group’s third-quarter results support the confidence we communicated in November last year that the organisation is poised for a stronger second-half performance,” said CEO Shameel Joosub.
“While currency headwinds continue to impact various markets where we operate, the focused execution of our strategy has resulted in a resilient operational response to the extent that we remain well on track to deliver on our medium-term financial targets.”
He said recent currency market stability, particularly in Egypt, boded well for the group’s performance in the year ahead.
Accelerated growth in SA’s prepaid market and “another stellar performance” in Egypt and Tanzania had a positive effect on the quarter, while network operators in Mozambique, including Vodacom, have been hampered by post-election tension since October 2024.
The group celebrated a number of key milestones in the period, including partnering with Orange in the Democratic Republic of Congo (DRC) to accelerate rural coverage, launching M-Wekeza in Tanzania to make investments more accessible and introducing a cloud-based handset to reduce the cost of smartphone access in SA.
“As part of our digital and financial inclusion drive across our footprint, including Safaricom, we serve over 210-million customers with our sights firmly set on connecting the next 100-million Africans to the digital economy,” Joosub said.
Ethiopia, the continent’s second most populous country, was expected to play a significant role in this ambition and was already making progress, with Vodacom’s customer base increasing 63.6% to 7.1-million.
“Additionally, we are well on track to reach our medium-term target of a 25%-30% contribution to group service revenue from what we now call our beyond mobile services. Previously billed as ‘new services’, beyond mobile encompasses digital and financial services, fixed and IoT [Internet of Things] and now makes up 21.4% of the group total having delivered R6.6bn in service revenue in the quarter.”
Update: February 3 2025 This story has been updated with additional information.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Egypt remains star performer for Vodacom
Group says its resilient operational response is due to ‘focused execution of our strategy’
Shares in Vodacom rose as much as 8.6% as the telecom group reported higher revenue for the three months to end-December, with Egypt remaining a star performer for the group.
Group revenue rose 1.6% to R39.5bn, due to a stronger rand, and by 12.6% on a normalised basis, which represents performance on a comparable basis and adjusts for foreign currency fluctuation on a constant currency basis and excludes the effect of mergers and acquisitions and disposal activities.
Service revenue growth accelerated to 11.6% on a normalised basis, above the group’s medium-term target, but was down 1.4% on a reported basis, it said in a statement on Monday.
SA grew revenue by 4.7% to R23.86bn, with service revenue growth improving to 3.2%, supported by prepaid.
This picture helped to drive up market sentiment on Monday, with Vodacom shares up to R119.31 at their peak in morning trade. The stock pared some of those gains, closing 5.68% firmer at R116.11.
The JSE’s largest mobile operator by market capitalisation, at R241bn, has seen its share price increase by more than 24% over the past year.
Vodacom, traditionally the safe investor bet for the sector, has become exposed to some of the same volatility as MTN since taking over Vodafone’s operations in Egypt. The Egyptian pound has lost about 40% against the dollar over the past year, taking a toll on Vodacom’s earnings.
Underlying performance
But the group remains positive about the unit’s underlying performance, which is strong.
Egypt’s revenue, at R7.77bn, was up 54.9% on normalised basis, but down 7.5% on a reported basis. The Egyptian business grew service revenue 44.3% in local currency, with financial services revenue also up.
Sector rival MTN’s share price was flat on the day at R115, while Telkom gained 1.07% to R33.89.
International service revenue increased 1.4% to R7.8bn, and by 7% on a normalised basis, affected by rand strength and pressure in Mozambique.
Group financial services revenue increased 5.7% to R3.6bn and the group transacted $437.7bn through its mobile money platforms, including Safaricom, over the past 12 months.
“Key trends from Vodacom group’s third-quarter results support the confidence we communicated in November last year that the organisation is poised for a stronger second-half performance,” said CEO Shameel Joosub.
“While currency headwinds continue to impact various markets where we operate, the focused execution of our strategy has resulted in a resilient operational response to the extent that we remain well on track to deliver on our medium-term financial targets.”
He said recent currency market stability, particularly in Egypt, boded well for the group’s performance in the year ahead.
Accelerated growth in SA’s prepaid market and “another stellar performance” in Egypt and Tanzania had a positive effect on the quarter, while network operators in Mozambique, including Vodacom, have been hampered by post-election tension since October 2024.
The group celebrated a number of key milestones in the period, including partnering with Orange in the Democratic Republic of Congo (DRC) to accelerate rural coverage, launching M-Wekeza in Tanzania to make investments more accessible and introducing a cloud-based handset to reduce the cost of smartphone access in SA.
“As part of our digital and financial inclusion drive across our footprint, including Safaricom, we serve over 210-million customers with our sights firmly set on connecting the next
100-million Africans to the digital economy,” Joosub said.
Ethiopia, the continent’s second most populous country, was expected to play a significant role in this ambition and was already making progress, with Vodacom’s customer base increasing 63.6% to 7.1-million.
“Additionally, we are well on track to reach our medium-term target of a 25%-30% contribution to group service revenue from what we now call our beyond mobile services. Previously billed as ‘new services’, beyond mobile encompasses digital and financial services, fixed and IoT [Internet of Things] and now makes up 21.4% of the group total having delivered R6.6bn in service revenue in the quarter.”
Update: February 3 2025
This story has been updated with additional information.
mackenziej@arena.africa
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