Vodacom profits increase
Vodacom (VOD) has reported a rise in diluted headline earnings per share to 394.6 cents for the six months ended September 2012 from 322.2 cents a year ago. HEPS were up 22.2% to 396 cents.
Group service revenue was up 6.9% to R29.67 billion and operating profit was 22.8% higher at R8.97 billion.
Group active customers increased 20.8% to 50.1 million.
South Africa´s service revenue grew 1.3% to R23.8 billion.
The company said given the challenging economic and competitive environment the underlying growth in service revenue was a positive reflection of the steps taken during the period to incentivise higher usage and to drive take up of data services through value promotions.
Revenue growth was 3.7%‚ mainly due to increased sales of high-end smartphones.
Data revenue increased 13.5% to R4. 22 billion‚ contributing 17.7% to service revenue compared to 15.8% a year ago. Data traffic grew 42.5% which more than offset a 24.2% reduction in average effective price per megabyte.
Group CEO Shameel Joosub described the results as “great”‚ with improvements in the traditional voice business and strong performances in the data and International segments lifting overall revenue growth.
“We also controlled costs well‚ with the end result that despite aggressive competition and an inflationary cost environment‚ we actually managed to increase margins‚” he added.
“Thanks to our proactive added value approach‚ particularly the use of voice and data promotions‚ traffic growth in South Africa more than offset the impact of lower prices. Our strategy of driving smartphone penetration and data usage is working well‚ with the number of active smartphones in South Africa growing 36% and the average amount of data used by each of those handsets up 46%. Across the Group‚ only 35% of our active customer base is using data so we’re still very much at the beginning of this growth trend‚” he added.
He noted that the International operations performed extremely well with strong commercial propositions and the benefits of scale resulting in significantly higher margins.
“Very importantly‚ underpinning the growth in all areas of the business was an increase in investment. Network leadership is a crucial part of Vodacom’s strategy and a key differentiator. We increased the number of 3G base stations in the Group by more than 22% and thanks to the foundations laid over the past few years we were the first to launch LTE services in South Africa‚” he concluded. - I-Net Bridge