Vodacom declares special dividend as international results sparkle
Mobile operator Vodacom on Monday rewarded shareholders with R1.1bn for a special dividend, reporting a surge in international revenue in the six months to end-September due to high demand for data and mobile-money services.
Political and economic stability in the group’s international segment boosted service revenue 15.5% to R10.78bn, Vodacom said, also benefiting from favourable exchange rates during the period.
Service revenue in SA grew only 0.3% to R25.79bn, the company said, with prepaid customer revenue declining 2.1% as a result of a 60% fall in out-of-bundle data revenue.
The company announced a 70% reduction in out-of-bundle tariffs in March, saying on Monday it would continue to drive down the cost of data, and had seen the benefits of this approach in its second quarter.
Data traffic increased by 54.6% in SA during the six months to end-September, with the company saying this was evidence of the value of its pricing transformation, with the number of 4G devices on its network rising by more than 25% during the period.
Headline earnings per share (HEPS) rose 18.9% to 460c and net profit 20.8% to R8.2bn.
The company declared an interim dividend of 380c, down 3.8% from the year-earlier period, although it also declared a special dividend of 60c per share.
The company added 2.7-million customers and 2.7-million to Safari.com during the period, bringing its total to 115-million.
“Ongoing initiatives to enhance customer experience through pricing transformation, modernisation of IT systems and sustained investment in network infrastructure continue to pay dividends,” group CEO Shameel Joosub said.
Joosub said that some of the group’s priorities would be to track the spectrum allocation process in SA, increase engagement with customers and take advantage of opportunities in their fintech business and M-pesa, which contributed R1.9bn to the group’s service revenue.
Vodacom CFO Till Streichert said the group was also using artificial intelligence as a way to save on costs, with its TOBi chatbot used to engage customers more.
The chatbot can handle customer queries that would otherwise have been handled as calls by a human operator. That has resulted in a 25% reduction in total call volume for the operator, Streichert said.
Vodacom said on Monday its target over the next three years was for mid-single-digit service-revenue growth, and mid-to-high-single-digit operating profit growth.
Vodacom’s share price was down 2.32% to R131.87 in afternoon trade.