Vodacom Group lifted revenue 14.8% to R30.7 billion in the three months to December 31, after benefiting from the Vodafone Egypt acquisition, rand depreciation and continuing fast growth in financial services.
The cellphone operator said group service revenue was up 16.1% in the third quarter of its financial year, with normalised growth of 3.5% supported by growth in data revenue and financial services.
South Africa service revenue grew 3% to R15.39bn following a strong performance in mobile prepaid.
International service revenue increased 18% to R6.98, driven by data revenue growth and a weaker rand.
Financial services revenue increased 30.6% to R2.6bn, with VodaPay app downloads reaching 4.5 million.
Vodafone Egypt was consolidated from December 8, 2022 and R1.88bn revenue was reflected.
CEO Shameel Joosub said the acquisition of a 55% stake in Vodafone Egypt for R46.3bn was a “transformative transaction for the group”, and would position the group as “a leading pan-African technology company”.
“It also means our population reach exceeds 500 million people across Africa, providing a clear growth path for Vodacom,” he said.
Normalised group revenue, which strips out currency fluctuations and the impact of Vodafone Egypt’s acquisition, grew by 4.3%.
He said investments into technology and network infrastructure contributed to Vodacom South Africa's increase in revenue.
“In addition to a successful summer campaign, this growth was led by a greater contribution from new services and an acceleration in prepaid mobile revenue,” he said.
The acquisition of a joint venture stake in South African fibre company Maziv, previously InfraCo – the deal still awaits Competition Commission approval – would help to narrow the digital divide by enabling affordable access to connectivity through “an ambitious fibre roll-out programme,” he said.
Financial services, the fastest growing contributor to Vodacom’s suite of services, gathered momentum. The 30.6% increase in financial services revenue to R2.6bn was largely due to demand for services on an evolving M-Pesa platform across the international portfolio, as well as double-digit growth in insurance policy and Airtime Advance sales in South Africa.
International services revenue growth was underpinned by a 33.6% increase in M-Pesa revenue and a 32.5% rise in data revenue. Over 12 months, M-Pesa processed $366.7bn (R6.4 trillion), an increase of 17%, and it remained Africa’s largest mobile money platform by transaction value, Vodacom said.
“We continue to ensure we have the right measures in place ‘including our commercial initiatives and cost-efficiency programmes’ to help mitigate the impacts from the global macroeconomic risks,” said Joosub.
Bianca Lakha, a junior analyst at Old Mutual Wealth Private Client Securities, said: "They highlighted the business’ resilience and astute capital allocation ability to succeed....At Old Mutual Wealth Private Client Securities, we remain confident about Vodacom’s ability to grow earnings amid a challenging macro-economic environment. Furthermore, the group’s strong balance sheet and healthy cash flow generation support its growth ambitions.”