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South Africa
South African operations grew marginally in FY17, now equating to nearly 80% of total group revenue and more than 90% of group Earnings before Interest & Tax (EBIT).
The local operations saw services revenue boosted by another (expected) strong performance from data sales which increased by 19.70% and enterprise revenue which grew by 12.7% over the period.
Equipment sales negatively affected the South African and group revenue figures, contracting 4% over the year. Management has sighted a weaker ZAR against the Euro and USD as reasons for the revenue decline, although the ZAR has in fact been strengthening over the reporting period. Perhaps ZAR volatility the more accurate description in terms of being a significant negative catalyst.
The South African customer base managed to increase by a healthy 8.6% to 37.1m, with the Average Revenue Per User (ARPU) also increasing, by 2.8%.
International
The international operations had a relatively lacklustre year with service revenue contracting by 5.5% over the period. Exchange rate volatility and customer disconnections in DRC, Mozambique and Tanzania, for regulatory compliance purposes (particularly in the previous year), have been cited as reasons for the decline. The non-SA business did however manage to increase the customer data base by 9.3% to 29.7m.
Safaricom Acquisition
In addition to the results, Vodacom has announced that it will acquire a 35% ($2.6bn) stake in Kenya’s Safaricom, from Vodafone. The deal will take the form of an equity swap, where Vodacom will issue 226.8m new shares to Vodafone for the 35% holding, in what is Kenya’s leading telecoms provider, boasting over 70% of the region’s subscribers.
Technicals
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