Vodacom achieves five-year strategy targets and increases the 2025 dividend by 5. 1%

IOL News

19-05-2025

Vodacom hopes to grow its customer base to 260 million people using its network by 2030, this after reaching 211.3 million customers in its 2025 financial year.
Image: Supplied
Vodacom Group met five-year targets and lifted its full-year dividend 5.1% to 620 cents a share, even though it served 9.2 million fewer customers in the year to March 31.
South Africa's second biggest mobile network operator has also upgraded its medium-term operational earnings growth targets.
CEO Shameel Joosub said Monday normalised earnings before interest, tax, depreciation and amortisation increased 7.8% to R55.52 billion in the past year and that the five-year target for this metric had been adjusted to double-digit figures from high single-digit figures.
'As we draw the curtain on our Vision 2025 strategy, I am proud of the progress we made over five years to deliver on our targets. This was despite a challenging environment marked by a global health crisis, currency volatility, geopolitical tensions, inflation pressures and energy disruptions in South Africa,' Joosub said in a statement.
He said they finished the second half strongly, despite currency volatility, which had since stabilised, particularly in Egypt.
Group revenue increased 1.1% to R152.2bn, despite big foreign exchange headwinds. Group service revenue fell by 0.1% in rands, but increased 11.2% on a normalised basis, above the medium-term target.
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Financial services revenue increased 17.6% on the same basis to R14bn, contributing 11.6% to group service revenue.
The group now serves a combined 211.3 million customers and 87.7 million financial services customers, including Safaricom on a 100% basis.
'Over the five-year period, we significantly expanded geographic and product diversification resulting in the number of customers using our networks increasing from 115.5 million to 211.3 million, while financial services customers rose from 53.2 million to 87.7 million, including Safaricom, over the same period,' said Joosub.
Headline earnings a share for the past year increased 1.3% to 857 cents, reflecting strong growth in the second half. Operating profit was up 10.9% to R35.79 billion.
'We now seek to ensure we deliver against our Vision 2030 ambitions, which include growing our customer base to 260 million and financial services customer base to 120 million,' he said.
Group service revenue from beyond mobile was targeted to increase to 30% from 21% currently. Group service revenue and EBITDA targets were upgraded from high single-digit to double-digit growth.
He said the performance in South Africa over the past year had been resilient, and there was outstanding, continued growth in Egypt and Tanzania. The businesses in Mozambique and DRC were impacted by post-election tensions and conflict, but with momentum behind peace efforts in both countries, the group was hopeful of improved prospects.
The South African business saw service revenue growth of 2.3%, led by a recovery in the prepaid segment, sustained data traffic growth of over 36.4%, and the increasing contribution of beyond mobile services.
'These services, encompassing financial and digital services, fixed and IoT, contributed R11.2bn, or 17.8% of South Africa's service revenue,' he said.
The International business spanning DRC, Lesotho, Mozambique and Tanzania achieved 7.1% normalised service revenue growth. Tanzania saw service revenue growth of 20.5% and EBITDA increased 25.2% in shillings. Lesotho and DRC grew service revenue by 10.4% and 8.2% respectively, in local currency.
M-Pesa, Africa's largest mobile money platform, processed over $450.8bn in transaction value, reflecting an 18.3% increase.
In Ethiopia, a 103.2% increase in customer base to 8.8 million was driven by growing demand for connectivity and a growing commercial trajectory. Service revenue in local currency increased 238.9%.
'As the second most populous country in Africa, Ethiopia remains integral to our long-term growth ambitions, and we are encouraged by the market's response to our entry and the regulatory strides being made,' said Joosub.
Egypt delivered service revenue of R27.7bn, contributing 23% to the group. Service revenue for the year was up 45.2%, accelerating to 47.7% in the fourth quarter, supported by a strong commercial campaign and price adjustments across mobile and fixed services in December.
The group has lodged an appeal at the Competition Tribunal following a decision to prohibit Vodacom's proposed acquisition of a stake in Maziv, the parent of Vumatel and Dark Fibre Africa.
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