Vodacom Group reports 3.6% revenue rise, 21.9% surge in net profit for FY10/11

16 May 2011

South Africa-based Vodacom Group has reported consolidated revenues of ZAR54.1 billion (USD7.7 billion) for the twelve months ended 31 March 2011. This figure represents an increase of 3.6% year-on-year, compared to ZAR52.2 billion reported a year earlier. EBITDA for the period grew 4.1% to ZAR20.6 billion, whilst operating profit climbed 21.9% to ZAR13.7 billion, primarily due to a reduction in impairment losses, mainly relating to the Vodacom Gateway unit. Meanwhile, CAPEX for FY10/11 decreased 4.9%, to ZAR6.3 billion. Vodacom’s domestic unit, Vodacom South Africa accounted for ZAR46.4 billion in service revenues, or 85.8% of the group’s total annual revenues. Of the South African unit’s total revenues, mobile voice traffic was responsible for the lion’s share of the takings, generating ZAR28.6 billion, whilst mobile interconnection fees contributed ZAR6.8 billion, mobile data ZAR6.2 billion and mobile messaging ZAR2.9 billion. Data exhibited the largest increase year-on-year, growing 33.9%.

In operational terms, Vodacom South Africa remains the firm’s largest unit by subscribers, although its customer base grew just 1% year-on-year, to 26.5 million. Although Vodacom South Africa’s pre-paid connections dropped 1.6% year-on-year, the losses were offset by the company’s enlarged post-paid subscriber base, which grew 14%, to 5.1 million. Elsewhere, Vodacom units in Tanzania, Democratic Republic of Congo, Mozambique and Lesotho all increased their subscriber bases in the twelve months ended 31 March. Mozambique contributed the largest proportion of growth, increasing its customer base 32.3% to 3.08 million. Tanzania grew its subscriber base 21.9%, to end the year with 8.86 million subscribers, whilst Lesotho weighed in with 859,000 customers (up 26.7%) and Democratic Republic of Congo 4.15 million subscribers (up 23.9%). Vodacom Group ended the financial year with a consolidated wireless subscriber base of 43.49 million.

With reference to the company’s recent re-branding exercise, which saw Vodacom adopt the red colour scheme used by its UK-based parent company Vodafone, CEO Pieter Uys commented: ‘We’ve gone from cool blue to red hot. Credit to the team for the financial and operational results, delivered in an environment of mobile termination rate reductions, price reductions and inflationary cost pressure. This has been achieved through a sharp focus on the customer experience, the ZAR6.31 billion capital invested in our networks and delivering on our ZAR500 million cost efficiency programme. The resulting 51% increase in total shareholder returns is really pleasing. The decision we took some years ago to lead the industry on mobile data is bearing fruit. The combination of considerable investment in new base stations and taking charge of our own transmission has put us in an enviable position. The new dual-carrier technology that we are rolling out across the network has both speed and capacity benefits and will support continued growth in the data business.

After taking a long, hard look at how we can improve the customer experience –knowing that this is the key to continued success – we realised that we needed a fresh approach to strategy setting and an unencumbered organisation to deliver it. The change from blue to red is just an outward indicator of all the internal changes underway which will deliver real benefits to customers across the areas of network, customer experience and value’.