Vodacom Group Limited trading update for the quarter ended 31 December 2023

Vodacom Group reported a notable 26.8% increase in group revenue, reaching R38.9 billion, primarily driven by the acquisition of Vodafone Egypt. The inclusion of Vodafone Egypt in the pro-forma basis contributed to a service revenue growth of 8.8%, aligning with the higher end of the medium-term target. The total customer base for the Group, including Safaricom, reached a milestone of 200 million, with over 75 million utilizing financial services.

In South Africa, service revenue grew by 1.9%, facing a strong comparative period from the previous year. Meanwhile, Egypt experienced a substantial service revenue growth of 29.1% in local currency, with a 55.5% increase in financial services customers, totaling 7.5 million.

International service revenue witnessed a growth of 10.7% (6.5%*), fueled by accelerated data revenue growth due to increased network investment. Group financial services revenue soared by 31.0% (19.6%^) to R3.4 billion, with a staggering US$98.2 billion transacted through mobile money platforms in the quarter.

Shameel Joosub, Vodacom Group CEO, highlighted key milestones, including Vodacom Mozambique’s 20th anniversary, 5G trials in the DRC, and the announcement of Project Kuiper in collaboration with Amazon’s LEO satellite communications initiative.

The 20-year milestone in Mozambique showcased Vodacom’s significant contribution to digital and financial inclusion in the country. Project Kuiper, along with existing satellite partnerships, aims to extend 4G and 5G services to areas that might be operationally challenging or expensive through traditional means.

With the acquisition of Vodafone Egypt, the Group’s revenue surged by 26.8% to R38.9 billion in the quarter. On a pro-forma basis, including Egypt as if owned since April 1, 2022, revenue growth reached 9.6%. Egypt’s local currency revenue growth of 31.5% was driven by robust performances in mobile data, fixed services, and financial services, including a remarkable 40.7% improvement in data traffic. In South Africa, revenue growth of 4.0% was achieved, considering the prior-year quarter’s challenges due to loadshedding.

The International business segment saw a 25.4% increase in 4G sites, supporting local currency revenue growth. The focus on network investment, digital inclusion, and innovative financing and coverage models is expected to unlock further growth opportunities across the eight markets.

Revenue from new services, including financial and digital services, fixed, and IoT, is progressing well, aiming to contribute 25-30% over the medium term. In the current quarter, new service revenue surpassed 20%, amounting to R6.2 billion. Financial services remained the dominant component, growing by 31.0% to R3.4 billion, driven by the expansion of new products and a 12.0% increase in customer growth.

Vodacom Group maintains its position as Africa’s largest mobile money platform by transaction value processed, reaching close to US$100 billion in the quarter. The ongoing super-app roll-out, particularly in South Africa with VodaPay reaching 4.8 million registered users, indicates strong user engagement.

Looking ahead, the company acknowledges the financial constraints on customers due to the high cost of living and is committed to delivering innovations that enhance customer value. Considering the evolving macro-economic environment and potential challenges like foreign exchange rate risk, Vodacom Group expects its resilient business model to endure.

In the longer term, the company remains dedicated to its purpose of connecting people for a better future. The strategic execution is anticipated to create substantial economic value in the markets of operation, addressing inequality by driving access to smartphones, financial services, healthcare, and education across all markets.

Source Link

Newsletter Updates

Enter your email address below and subscribe to our newsletter