Vodacom postpones issuance of its medium-term guidance
JOHANNESBURG - Vodacom today postponed the issuance of its medium-term guidance given the effects of the Covid-19 pandemic and the uncertain outlook for the countries it operates in, as it reported higher revenue during the year ended March 2020.
“It is for this reason that we are postponing our medium-term guidance until more certainty emerges both in terms of the economies that we operate in and in terms of how customer behavior will change. Once these factors stabilize we will resume our targets and tell you how we think the next three years will look,” said chief financial officer Chief Till Streichert who will leave the company next month.
Group revenue for the period under review jumped 4.8 percent to R90.7 billion from R86.6bn a year earlier. Headline earnings a share increased 8.9 percent increase to R9.45 a share and shareholders received a dividend return of R8.45 a share.
Group chief executive Shameel Joosub said that group customer growth was in healthy shape.
“The past year has been characterized by strong customer growth. We now connect 116 million customers across the group, including Safaricom – and the benefits of prudent portfolio diversification,” Joosub said.
In South Africa, data customers increased by 9.7 percent during the year ended 2019 as out-of-bundle data rates announced in the first quarter led to a steady increase in data traffic.
“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 percent from 1 April 2020 and the launch of our ConnectU platform, which provides easy access to numerous zero-rated essential service websites,” said Joosub.
In April Vodacom slashed the price of its monthly bundles and provided free access to basic internet for essential services in line with recommendations made by the Competition Commission Data Services Market Inquiry.
“These initiatives will provide savings of R2.7 billion to customers at a time when economies around the world are suffering from the Covid-19 pandemic. Despite deteriorating economic pressures and the proactive price cuts to our out-of-bundle rates, service revenue rose 2.3 percent in our biggest market, Joosub said.