South Africa: Vodacom targets double-digit service revenue growth by 2028
South Africa's biggest mobile operator Vodacom reported a marginal rise in annual earnings and aims to accelerate group service revenue growth into a double-digit rise over the next three years, it said on Monday.
Vodacom, majority-owned by UK-based Vodafone, said headline earnings per share rose by 1.3% to 857c in the year ended 31 March, on a stronger second-half performance, though gains were capped by significant currency volatility.
Group service revenue slipped 0.1% in rand terms to R120.7bn ($6.7bn).
However, it was up 11.2% on a normalised basis, reflecting a 45.2% surge in revenue from Egypt in local currency terms and sturdy growth in its "beyond mobile services" across the group, which include fibre, digital and financial services.
Normalised basis calculation adjusts for foreign currency fluctuations, hyperinflation accounting and excludes the impact of mergers, acquisitions and disposals.
As part of its vision for 2030, Vodacom upgraded its target for service revenue on a normalised basis to double-digit growth by 2028, from a high single-digit rise.
Group CEO Shameel Joosub said on a media call that the growth will be driven by expectations of more stability in the currencies the group is exposed to and improved economic growth.
"I think all things considered, and the way we're executing on the different parts by growing customers, diversifying our beyond mobile ambitions, specifically in the fintech and fibre space, I think bodes well for this next period," Joosub said.
In February, Vodacom also upgraded its earnings before interest, tax, depreciation and amortization (EBITDA) target upward to double-digit growth.
Its EBITDA for the reporting period fell 1.1% to R55.5bn but grew 7.8% on a normalised basis.
On the outlook for the group's business portfolios, Joosub said he expected mid-single-digit growth in its domestic market, a double-digit rise in its international business and growth in Egypt "in the 20s".
Vodacom also expects group service revenue contribution from "beyond mobile" services to increase to 30% by 2030 from 21%, as it introduces advanced fintech services in Egypt.
All rights reserved. © 2022. Bizcommunity.com Provided by SyndiGate Media Inc. (Syndigate.info).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
6 hours ago
- Zawya
Orange Middle East and Africa and risingSUD join forces to facilitate the establishment and development of startups in the South of France
At the Viva Technology trade show in Paris, Orange Middle East and Africa (OMEA) ( represented by its CEO Jérôme Hénique, and risingSUD, represented by its President Bernard Kleynhoff, signed a strategic partnership to support the establishment and growth of African startups in the Orange Digital Center network in the Provence-Alpes-Côte d'Azur region, in the South of France. This three-year partnership aims to bring together innovation ecosystems in Africa, the Middle East, and the South of France. Specifically, startups from the Orange Digital Center network will benefit from tailored support from the teams at risingSUD, the Provence-Alpes-Côte d'Azur region's economic attractiveness and development agency, to establish themselves in the South of France. They will thus join a dynamic region that is already home to 500,000 companies, including global leaders and startups that are inventing the world of tomorrow. With this partnership, OMEA strengthens its support for the internationalization of startups from Africa and the Middle East and reaffirms its commitment to developing the continent's entrepreneurial ecosystems. Deployed in 17 countries in Africa and the Middle East and eight countries in Europe, the Orange Digital Center network is a free and accessible ecosystem for all. It brings together, in one place, digital skills training for young people, support for project leaders, incubation, acceleration, and startup financing. In 2024 alone, risingSUD supported the establishment of 14 African companies in the South of France, including the startup from the Orange Digital Center in Tunisia, Guépard, which opened an office in Marseille. This partnership will allow more startups from Africa and the Middle East to benefit from risingSUD's expertise, ranging from project development to access to financing and networking with international partners. It will also facilitate access for talent and startups from the South region to the Orange Digital Centers network. Jérôme Hénique, CEO of Orange Middle East and Africa, commented: 'This partnership with risingSUD marks a key step in our ambition to promote African innovation internationally. It is a continuation of the support we offer startups through our Orange Digital Centers. By facilitating their establishment and acceleration in France, particularly in the South region, we are giving young African companies the means to accelerate their growth.' Bernard Kleynhoff, President of risingSUD and President of the Economic and Digital Development, Industry, Export, Attractiveness and Cybersecurity Commissions of the Sud Region, added: 'Thanks to its strategic position, its historical trade flows and its commitment to innovation, the South of France is a natural bridge between Europe, Africa and the Middle East. It is now the leading French region for hosting African investment projects. This partnership opens up new economic opportunities and constitutes a real springboard for the development of businesses on both sides of the Mediterranean.' Distributed by APO Group on behalf of Orange Middle East and Africa. Press contacts - OMEA: Stella Fumey Press contacts - Orange: Ibtissame Nafii Press contacts - risingSUD: Virginie Vial Isnard vvial-isnard@ Follow Orange: For more information on the internet and on your mobile: and the Orange News app or to follow us on Twitter: @orangegrouppr. About Orange Orange is one of the world's leading telecommunications operators with revenues of 40.3 billion euros in 2024 and 127,000 employees worldwide at 31 December 2024, including 71,000 employees in France. The Group has a total customer base of 291 million customers worldwide at 31 December 2024, including 253 million mobile customers and 22 million fixed broadband customers. These figures account for the deconsolidation of certain activities in Spain following the creation of MASORANGE. The Group is present in 26 countries (including non-consolidated countries). Orange is also a leading provider of global IT and telecommunication services to multinational companies under the brand Orange Business. In February 2023, the Group presented its strategic plan "Lead the Future", built on a new business model and guided by responsibility and efficiency. "Lead the Future" capitalizes on network excellence to reinforce Orange's leadership in service quality. Orange is listed on Euronext Paris (symbol ORA). Orange and any other Orange product or service names included in this material are trademarks of Orange or Orange Brand Services Limited. About Orange Middle-East and Africa (OMEA): Orange is present in 18 countries in Africa and the Middle East and has 161 million customers at 31 December 2024. With 7.7 billion euros of revenues in 2024, Orange MEA is the first growth area in the Orange group. Orange Money, its flagship mobile-based money transfer and financial services offer is available in 17 countries and has more than 100 million customers. Orange, multi-services operator, key partner of the digital transformation provides its expertise to support the development of new digital services in Africa and the Middle East. About risingSUD: risingSUD is the economic attractiveness and development agency for Provence-Alpes-Côte d'Azur, in the South of France. With a team of 50 people, risingSUD supports more than 400 companies each year through key moments of their growth: setting up, raising fund, exporting... The agency also supports nearly 70 strategic projects per year and attracts investors and talent from around the world to strengthen the territories and sectors of excellence in the South of France.
Zawya
6 hours ago
- Zawya
MultiChoice Group's focused interventions help to counter unprecedented headwinds
Amid an exceptionally challenging macroeconomic environment, MultiChoice Group ( continued to navigate external pressures through focused strategic interventions. Download Factsheet (PT): The Group delivered ZAR3.7bn in cost savings, well ahead of the revised ZAR2.5bn target set at the interim stage and almost double the ZAR1.9bn saved in FY24. A disciplined approach to inflationary pricing, with increases of 5.7% in South Africa and an average of 31% in local currency in Rest of Africa, also helped to mitigate the impact of subscriber losses and supported 1% year on year (YoY) organic revenue growth. 'Our performance reflects both the challenges we've faced and the resilience of our teams. While macroeconomic pressures and currency volatility have weighed on our results, our disciplined execution, cost management and investment in new long-term growth opportunities position us well for the future,' says Calvo Mawela, MultiChoice Group CEO. 'We remain focused on being Africa's entertainment platform of choice. Our strategy is shaped by developments in our industry such as changes in technology which are driving shifts in consumer behaviour, as well as the impact of a rise in piracy, streaming services, and social media,' says Mawela. Highlighting the Group's ability to adapt to these changes in the global video entertainment landscape, new products and services delivered strong YoY growth. Revenue from DStv Internet grew by 85%, KingMakers 76% (in constant currency) and DStv Stream 48%. Showmax active paying customers increased by 44% YoY. Importantly, the group returned to a positive equity position through a combination of cost savings, a stabilisation in currencies, and the accounting gain on the sale of 60% of the Group's shareholding in its insurance business (NMSIS) to Sanlam. Financial Results Overview Subscriber base: The rate of subscriber decline has decelerated, with the active linear pay-TV subscriber base of 14.5m reflecting a decline of 8% compared to 11% (14.9m) in FY24. The pressure was mainly due to a weak consumer environment across markets. Group revenues: On an organic basis, revenues increased by 1% YoY, driven by pricing and new product growth. On a reported basis, revenues declined by 9% YoY to ZAR50.8bn, primarily due to an 11% drop in subscription revenue, as well as the impact of currency headwinds, and the deconsolidation of the NMSIS insurance business from December 2024. Group trading profit: Trading profit increased by 20% YoY, before accounting for the investment in Showmax, the impact of currency weakness and M&A activity. After incorporating Showmax's trading losses and ZAR5.2bn in foreign currency revenue losses, and partially offset by the ZAR3.7bn in cost savings, trading profit on a reported basis declined to ZAR4.0bn. Adjusted core headline earnings is the board's measure of the underlying performance of the business. The Group posted a loss of ZAR0.8bn, as a result of the lower trading profit and hedging losses compared to hedging gains in the prior year, partly offset by smaller losses from repatriating cash from Nigeria. Cash flow and liquidity: The Group recorded a free cash outflow of ZAR0.5bn, due to lower profitability and higher lease repayments due to timing. This was partly offset by improved working capital management and a 29% YoY reduction in capital expenditure. At year-end, the Group held ZAR5.1bn in cash and cash equivalents and had access to ZAR3.0bn in undrawn general borrowing facilities. Operational update General entertainment and sport Local content remains a key differentiator. The Group added over 5,340 hours of local content in the year, bringing the total local content library to more than 91,470 hours and cementing its position as Africa's largest producer of original content. Flagship reality show, Big Brother Mzansi, drew a record-breaking 3.8 million views for its season finale and received 293 million votes. In Nigeria, Big Brother Naija, continued to attract strong viewership into its ninth season. Sport also plays a critical role in the Group's content offering. SuperSport broadcast 47 839 hours of live coverage (+7% YoY) and produced 1 029 live events. Key highlights included the Paris 2024 Olympic Games, EURO 2024 football, three major ICC cricket tournaments and the SA 20 Season 3. SuperSport Schools continue redefine the landscape of school sports broadcasting. Its app saw 46% growth in registered users to reach 1.2 million, while the platform reached nearly 11 million unique viewers through the app and Channel 216 on DStv and delivered over 50 000 hours of new content. Business segments MultiChoice South Africa focused on subscriber retention and win-backs, identifying remaining growth opportunities, as well as optimising processes and systems to improve customer experience and operational efficiency. To enhance its value-proposition, the business tiered down certain channels, reintroduced the second concurrent stream at no extra cost and priced down its DStv ADD Movies package from R79 to R49. It also entered into new strategic partnerships with Capitec, MTN and PEP to expand its market presence. Faced with a tough operating environment, MultiChoice Africa implemented inflation linked price increases and continued its cost-containment measures by reducing spend in subsidies, marketing, content and transmission costs. Post year-end it piloted weekly subscriptions in Uganda to better align subscription periods with customers' cash flows. As a start-up business, Showmax focused on improving customer affordability and reach through distribution partnerships, improving customer sign-up journeys, improving platform development and continuing to expand payment options. Although subscriber growth has lagged initial exponential growth targets, Showmax still delivered a healthy 44% growth in active paying subscribers and gained market share in a regional streaming market which experienced muted growth. Irdeto grew revenue by 8% YoY on an organic basis (5% reported), increasing external revenue in all three market segments namely Video Entertainment, Gaming and Connected Transport. Revenues generated from new service lines increased to a pleasing 42% of total revenue, underpinned by innovative solutions to enhance security and interoperability in the transportation sector. KingMakers delivered strong organic growth in sports betting and i–gaming. BetKing Nigeria continues to gain strong momentum, especially in its online business. SuperSportBet, the South African business launched in 2024, is showing early signs of success and reported a material increase in monthly net gaming revenue during the year. Live in 44 African countries, Moment continues to scale rapidly, with total payment volumes (TPV) reaching USD635m, seven times higher than FY24. Moment processed 56% of the Group's payment volumes, compared to only 20% a year ago, and at the end of March this year, its annualised payments run rate exceeded USD1bn. Looking Ahead The Group remains focused on building a sustainable, long-term future by executing against its key strategic priorities. For the year ahead, there are three clear priorities: Stabilise the topline in the video businesses through focused retention initiatives, while supporting rapid topline growth in the group's interactive entertainment, fintech and insurance investees, Continue to drive operating, cost and working capital efficiencies into the group to protect profitability and cash flows, Continue to work with Canal+ towards a successful close of their mandatory offer in order to unlock significant long-term benefits for the combined entities and their respective stakeholders. Management has set a cost saving target of ZAR2.0bn for FY26 in an ongoing effort to reset the business for a shifting trading environment. On the back of its topline initiatives and cost and cash flow interventions, the group aims to deliver margins for MultiChoice SA in the mid-twenties range, to return MultiChoice Africa to profitability while limiting its funding and narrow trading losses in Showmax. Distributed by APO Group on behalf of MultiChoice Group.
Zawya
7 hours ago
- Zawya
South African parliament passes budget framework
South Africa's lower house of parliament passed the budget's fiscal framework and revenue proposals on Wednesday. The budget of Africa's biggest economy has been caught up in political wrangling for months. It has been reworked twice because of disagreements in the ruling coalition over plans to raise value-added tax. A majority of 268 lawmakers, including from the two biggest political parties the African National Congress (ANC) and the Democratic Alliance (DA), voted in favour of the fiscal framework and revenue proposals, while 88 voted against and 2 abstained. The ANC and the DA had been at loggerheads over the budget until the finance minister backtracked on a plan to raise value-added tax. The two parties have more than half of the lawmakers in the 400-member National Assembly. (Reporting by Alessandro Parodi and Sfundo Parakozov; Editing by Alexander Winning)
