Vodacom Group 1H revenue up 9.9%; net profit drops 98.4% due to heavy DRC taxation

9 Nov 2010

South Africa-based Vodacom Group has reported consolidated revenues of ZAR28.67 billion (USD4.19 billion) for the six months ended 30 September 2010. This figure represents an increase of 9.9% year-on-year. EBITDA for the period grew 8% to ZAR3.35 billion, whilst net profit crashed 98.4% to ZAR59 million, as a result of ‘group finance charges’ of ZAR1.11 billion and taxation of ZAR2.35 billion. Vodacom has indicated that the large tax bill is primarily down to the reversal of a deferred tax asset in the Democratic Republic of Congo during the previous reporting period.

Of the group’s revenues, mobile voice traffic was responsible for the lion’s share of the takings, generating ZAR15.48 billion, whilst mobile interconnection fees contributed ZAR4.46 billion. Mobile data and mobile messaging were responsible for ZAR2.03 billion and ZAR1.55 billion respectively. Vodacom’s domestic unit, Vodacom South Africa accounted for ZAR24.37 billion in sales, or 85% of the group’s total 1H revenues.

In a press statement Vodacom said: ‘While the macro economic climate is stable and there are positive signs in most of the countries in which Vodacom operates, markets are expected to remain challenging, primarily due to ongoing competitive and regulatory pressures. In October 2010, a fourth mobile operator launched service in

South Africa and the regulator announced further cuts in mobile termination rates (MTRs) effective from 1 March 2011. Increased voice usage and continued growth in data demand are expected to largely offset these pressures. The cost reduction programme is progressing well, with notable successes in managing customer acquisition and distribution costs in the past six months’.

South Africa, Vodacom Group