Vodacom quarterly results show sharp rise in group revenue
The acquisition of Vodafone Egypt and the depreciation of the rand have played a significant role in driving revenue growth over the quarter.
Key Takeaways:
- Group revenue for Vodacom Group increased by 36.9% (5.3%*) to R35.7 billion. This growth can be attributed to the acquisition of Vodafone Egypt and the depreciation of the rand against international currencies.
- Group service revenue saw a significant increase of 43.8%, or 9.8% excluding Vodafone Egypt (4.3%*). This growth was driven by data revenue growth and a weaker rand in the international market.
- In South Africa, service revenue grew by 3.9%, primarily supported by the contract segment, fixed services, and financial services. This indicates a positive performance in these sectors.
- Vodafone Egypt experienced a substantial growth in service revenue, with a 27.6% increase in local currency. This growth was primarily driven by a significant increase in financial services revenue.
- The financial services sector of Vodacom Group also showed impressive growth, with a 46.2% increase (14.2%*) to R3.0 billion. The mobile money platforms recorded a daily transaction volume of US$1 billion, indicating a strong presence in the financial services market.
In brief
Overall, Vodacom Group's trading update highlights positive growth in revenue, particularly in the service and financial services sectors. The acquisition of Vodafone Egypt and the depreciation of the rand have played a significant role in driving this growth. This update also suggests that Vodacom Group is performing well in the South African market, particularly in the contract, fixed, and financial services segments
IG client sentiment
The majority of IG clients (88%) with open positions on Vodacom as of the 21st of July 2023 expect the price to rise in the near term, while 12% of IG clients with open positions on the stock expect the price to fall in the near term.
Broker ratings
A Refinitiv poll of analyst and broker ratings for the company, as of the 21st of July 2023 arrive at a long term consensus ‘hold’ for the stock.
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