Vodacom hikes full-year dividend despite Covid-19

Vodacom Group has turned in a strong financial performance for the year ended 31 March 2020, allowing it to hike its dividend by 6.3% to R4.05/share before tax despite the darkening economic situation caused by the Covid-19 pandemic.

It added 5.9 million customers, to reach a 116 million across the group, including Kenya’s Safaricom. South African service revenue rose by 2.3%, with “data usage elasticity supporting recovery to growth in the second half” of the financial year.

Group revenue climbed 4.8% (3.5% normalised) supported by group service revenue growth of 5% (3.5%). Headline earnings per share were up 8.9%, though that was boosted by one-off costs of R1.5-billion associated with its black economic empowerment transaction in the 2019 financial year.

“In South Africa, sharp data price reductions, specifically out-of-bundle data rates announced in the first quarter, led to a steady increase in data traffic as the year progressed, with 1.9 million more data customers connecting to the Vodacom network — a 9.7% increase to 21.9 million,” said CEO Shameel Joosub in a statement.

“While it is still early days, the trend of increased data usage has continued into the current financial year following reductions in 30-day data bundle tariffs of up to 40% from 1 April and the launch of our ConnectU platform, which provides easy access to numerous zero-rated essential service websites,” he said.

‘One more service’

“As part of our strategy to build diverse and sustainable revenue streams, our efforts to introduce ‘one more service’ to customers continue to gain momentum. For instance, revenue from our financial services business in South Africa jumped by 21.5% to R2-billion, on the back of our popular Airtime Advance, insurance and VodaPay services.”

Vodacom’s digital services business also produced “solid growth”, contributing R1.5-billion in revenue on the back of increasing purchases of video-on-demand services and its music, sports, gaming and other video services.

The group recorded continued margin expansion in its international portfolio. This was helped by increased demand for data and M-Pesa mobile money services, contributing to a 12.5% improvement in service revenue. – © 2020 NewsCentral Media