Vodacom takes a hit on MTR cuts in FY15
JSE-listed Vodacom on Monday posted a 4% decline in headline earnings a share to 860c, and a 1.5% contraction in earnings before interest, taxes, depreciation and amortisation to R26.9-billion for the financial year to March 31.
During the 12-month period under review, the group’s revenue ticked up 2.1% to R77.3-billion and service revenue was up by a marginal 0.2% to R62.1-billion.
However, excluding the impact of a 50% cut in mobile termination rates (MTRs), group revenue increased 4.8% and group service revenue increased 3.4%.
“In South Africa, we faced major cuts in MTRs, a weak economic environment, exchange rate volatility and increased price competition,” Vodacom group CEO Shameel Joosub said.
Vodacom posted a 2.7% decline in service revenue in South Africa to R47-billion, which, excluding the impact of the MTR cuts, grew 1.5%.
Further, while pricing pressures in Tanzania and the Democratic Republic of the Congo also impacted the group’s performance, international service revenue increased 10% to R15.3-billion on the back of strong customer growth to 29.5-million.
Overall, Vodacom increased its customer base by 7.2% to 61.6-million, with active data customers increasing 15.9% to 26.5-million and Machine-2-Machine customers up 18.5% to 1.8-million during the 12 months to March 31.
The company also reported increasing its capital expenditure during the year under review by 23.4% to R13.3-million.
“Our focus on network investment is the key enabler behind the increasing contribution that data is making to service revenue,” Joosub said.
Another 2 576 third-generation (3G) sites were established across Vodacom’s operations during the year, with a doubling of long-term evolution sites to 2 610. Vodacom also extended its 3G coverage in South Africa to 95.6% of the population.
Vodacom declared a final dividend of 775c for the year.
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