Vodacom Group reported on Monday that its headline earnings per share (HEPS) dropped by 19.4%, reaching 353 cents for the six months ending September 2024. HEPS is a key measure of profitability in South Africa.
The decline in HEPS was largely attributed to the depreciation of the Ethiopian currency, which impacted earnings by 53 cents per share, as well as one-off costs in the company’s international operations.
Despite the drop in profits, Vodacom maintained its strong dividend policy, declaring an interim dividend of 285 cents per share, which represents an 86% payout ratio. “The group’s dividend policy remains unchanged and is based on a pay-out of at least 75% of headline earnings,” the company informed investors.
Vodacom’s total revenue for the period reached R74 billion, up 1.0%, despite facing significant foreign exchange challenges. On a normalised basis, group service revenue grew by 9.9%, hitting the higher end of the company’s medium-term growth target. Additionally, financial services revenue rose by 7.8% to R6.7 billion, contributing 11.4% to the Group’s service revenue.
However, group EBITDA fell by 2.7% to R26.6 billion, although it grew 8.5% on a normalised basis. Vodacom’s customer base across the group, including Safaricom on a 100% basis, now totals 205.6 million, with 82.9 million financial services customers.
“Celebrating Vodacom’s 30th birthday, connecting 206 million customers, and providing financial services to 83 million customers are some of the significant milestones in the Group’s history that I am particularly proud of,” said Shameel Joosub, Vodacom Group CEO.
“These were achieved in the first half of the current financial year, a period characterised by significant currency headwinds on one hand and a resilient operational response on the other, ensuring we continue to meet our medium-term financial targets. While our bottom line was impacted by various one-offs, I am confident that we are poised for a stronger second-half performance.”
In addition to mobile, Vodacom’s digital, financial, fixed, and IoT services contributed 21.1% to group service revenue, with mobile financial services such as payments, savings, loans, and merchant offerings playing a key role.
“Our mobile money platforms, including Safaricom, processed $421.3 billion in transaction value over the last twelve months, cementing our leadership as an African FinTech company,” said Joosub.
From signing up its first customer on June 1, 1994, when its South African network went live, Vodacom has grown to serve 205.6 million customers across South Africa, the DRC, Egypt, Ethiopia, Kenya, Lesotho, Mozambique, and Tanzania, reaching over half a billion people.
“While the industry and the company have had to adapt to evolving regulatory pressures and customer needs, Vodacom’s purpose has remained unchanged for the past three decades: to ensure that everyone is connected,” said Joosub.
Over the past five years, Vodacom has invested nearly R80 billion across its markets, with a particular focus on accelerating rural coverage.
“This has resulted in Vodacom securing its network leadership in most markets where we operate and in an additional 10.9 million customers joining our network over the last twelve months,” Joosub added.
