Vodacom Tanzania’s full year results mark an upward shift to revenue growth as its digital strategy continues to deliver - MWANAHARAKATI MZALENDO ™

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Saturday, May 12, 2018

Vodacom Tanzania’s full year results mark an upward shift to revenue growth as its digital strategy continues to deliver

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Vodacom Tanzania’s full year results mark an upward shift to revenue growth as its digital strategy continues to deliver
  • Service revenue grew 5.9% (7.0% excluding changes to the mobile termination rate (‘MTR’))to TZS966.3 billion, marking an upward shift to the annual growth trend seen over the past three years.
  • M-Pesa revenue grew 16.7% to TZS291.2 billion, fuelled by greater customer spend across a growing mobile money ecosystem.
  • Mobile Data revenue grew 34.7%, achieving TZS141.6 billion, supported by network densification, capacity upgrades and 4G expansion.
  • Active data customers grew by 882 thousand to 7.3 million, stimulated by digital social media partnerships and smartphone campaigns.
  •  EBITDA grew 5.5% to TZS266.4 billion, representing an EBITDA margin of 27.2%.
  •   Capital expenditure of TZS159.7 billion was reinvested to launch high speed 4G services in
    five new cities and improve data user experience countrywide.
  •  Earnings per share (‘EPS’) of TZ83.81, up 196.0%, includes gain from the sale of an equity
    stake in Helios Towers Tanzania Limited (‘HTT’) in October 2017.
    Dar-es-Salaam, 11 May 2018. Vodacom Tanzania Public Limited Company and its subsidiaries (together “the Group”) announced its preliminary consolidated results for the year ended 31 March 2018.
    The Group reported a 5.9% growth in service revenue which marks an upward shift in the growth trend seen over the past three years. In spite of a challenging trading environment, the Group exceeded the projected net profit for the year shown in its IPO prospectus, growing EPS by 196% to 83.81 shillings per share. This included gain from the sale of the Group’s equity stake in Helios Towers Tanzania in October 2017.
    Speaking in Dar es Salaam, Vodacom’s Managing Director, Mr. Ian Ferrao said, “The upward shift in service revenue growth and underlying improvement in profitability is underpinned by our success in delivering a superior data user experience and an ever- evolving mobile money ecosystem to our customers.
    Expounding on reported results, Ferrao added, “Good execution of network investments, customer value management, promotional offers, and targeted M-Pesa and datapropositions, all contributed to the year’s solid performance and earnings per share of TZS83.81.”


During the year ended 31 March 2018 Vodacom invested TZS159.7 billion to launch high speed 4G services in five new cities (Arusha, Dodoma, Morogoro, Moshi and Tanga) and improve data user experience countrywideOur active data customers continued to enjoy the fastest average download speeds available in Tanzania, largely as a result of sustained network densification, capacity upgrades and expanding our high speed 4G services. Looking ahead, we will seek to obtain the optimal amount of the spectrum available from the upcoming 700 MHz auction. Should we be successful, we expect to provide the benefits of a superior 4G data user experience to a greater number of communities acrossTanzania.” commented Ferrao.
On discussing M-Pesa’s performance, Ferrao commented “Targeted propositions andecosystem development increased customer spend across our M-Pesa base and escalated revenue growth to 16.7%. Our network of over 6 300 active “Lipa kwa M-Pesa”merchants makes M-Pesa the most convenient payment choice, outgrowing the number of payment card terminals across the country. Of the US$17.5 billion of payments made across the M-Pesa system as a whole, the equivalent of over US$160 million was transacted through our new merchant platform which we established during the year.”
When discussing the outlook, targets and priorities of the Group, Ferrao noted that “the actions we’ve taken as part of our continued commitment to improving compliance withcustomer registration requirements will result in subdued customer base growth over the short term. However, encouraging trends seen from the adoption of personalised offers– such as those provided through our “Just for You” platform – are expected to build customer loyalty within our registered customer base. In addition, we will continue to focus on cost optimisation to offset impacts from the downward shift and steepening of the MTR glide path effected by the TCRA in January 2018...”
Ferrao continued, providing the following guidance “...With the above in mind, we target mid single digit service revenue growth, with broadly stable capital intensity in the financial year ahead.*
For a copy of the consolidated preliminary results for the year ended 31 March 2018, please visit www.vodacom.co.tz/investor-relations
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This guidance assumes a stable regulatory and macroeconomic environment, with broad stability of the Tanzanian shilling against major trading currencies, and excludes any merger and acquisition activity. Risks of increases to regulatory levies and mandatory capital expenditure as part of government projects continue to threaten margin expansion and improved capital intensity respectively.
The tables shown below are abridged extracts from the Group’s consolidated preliminary results for the year ended 31 March 2018.
Please visit www.vodacom.co.tz/investor-relations to obtain a complete set of the Group’scondensed consolidated financial statements which have been reviewed by our auditors.
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