Vodacom has recorded a massive increase in group revenue in the quarter that ended on 30 June 2023. In a trading update for the first quarter of the 2024 financial year, Vodacom said that its group revenue increased by 36.9% (5.3% in terms of normalized growth) to over R35 billion, which was positively impacted by the purchase of Vodafone Egypt and rand depreciation against its basket of international currencies.
Vodacom Group CEO Shameel Joosub said that the boost in revenue was mainly due to Vodafone Egypt where revenue generated by financial services more than doubled, and successful Ramadan and summer campaigns led to a 43.2% increase in data traffic. Moreover, group service revenue grew by 43.8% or 9.9% when Vodafone Egypt is excluded (4.3%).
South Africa’s service revenue grew by 3.9%, which was underpinned by the contract segment, fixed and financial services.
Joosub noted that the group is making headway in its plans to mitigate the effects of load shedding.
In South Africa, our R4.0 billion investment over four years to mitigate the impacts of load shedding continues to pay dividends. We now invest more than R11.0 billion a year into our South Africa infrastructure alone, which has resulted in industry-leading network availability during elevated levels of power outages and ultimately contributed to the 3.9% increase in service revenue in our largest market.
In addition, he said that financial services remain a clear strategic priority for the group and led to a 46.2% increase in revenue to surpass the R3 billion mark in a quarter for the first time.
He said that this was due to a strong performance in South Africa and M-Pesa, and its new services, including loans and merchant services.
Below are some of the group’s key financials for Q1 FY24:
Outlook
In terms of mergers and acquisitions, Joosub said that the group awaits regulatory approval for a joint center stake of up to 40% in MAZIV, which he said will accelerate the group’s fiber reach in South Africa.
He added that the group’s new Ethiopian business, Safaricom Ethiopia, has made major progress since its commercial launch in October last year, reaching 2.7 million customers, with M-Pesa services set to launch in Q2.
Looking ahead, we are fully cognisant of the financial constraints on customers caused by global economic uncertainty and increased inflation. We remain committed to delivering innovations that enhance the value we deliver to customers and helping to alleviate cost of living pressures.
Longer term, we will relentlessly pursue our purpose of connecting people for a better future. I firmly believe that the continued execution of our strategy has the potential to create immense economic value in the markets where we operate, helping to address inequality.
