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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.

Source: Bloomberg

Key Takeaways:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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

Source: IG
Source: IG

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

Source: Refinitiv
Source: Refinitiv

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.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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