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Vodacom Group Limited Reports Strong Financial Performance for the Year Ended March 2023

Yebo Yethu RF
  • Vodacom Group Limited reports strong financial performance for the year ended March 2023.
  • Group revenue increases by 16.0% to reach R119.2 billion, driven by the acquisition of Vodafone Egypt and favorable currency fluctuations.
  • Service revenue grows by 17.2% (7.2% excluding Vodafone Egypt), supported by strong data and financial services performance.

Vodacom Group Limited has announced its preliminary results for the year ended 31 March 2023, showcasing impressive financial performance and notable achievements. The company’s strong growth was fuelled by a significant rise in group revenue, an expansion in service revenue, and the successful development of its financial services segment.

Group revenue for the year reached an impressive R119.2 billion, representing a substantial increase of 16.0% compared to the previous year. This exceptional growth can be attributed to the acquisition of Vodafone Egypt and favorable currency fluctuations against a basket of international currencies, both of which had a positive impact on the company’s financials.

The company witnessed robust growth in its service revenue, with a notable increase of 17.2% (or 7.2% excluding Vodafone Egypt). This growth was primarily driven by the strong performance of its data and financial services divisions. Financial services revenue experienced significant expansion, surging by 29.2% to reach R9.9 billion, contributing 10.5% to the group’s total service revenue.

Vodacom Group also reported a commendable growth rate of 13.2% in Group EBITDA (earnings before interest, taxes, depreciation, and amortization) or 6.0% excluding the impact of Vodafone Egypt. This improvement demonstrates enhanced profitability, particularly during the second half of the year, as the company successfully executed its strategic initiatives.

As of 31 March 2023, Vodacom Group served a combined customer base of 185.8 million across the group, including Safaricom on a 100% basis. The financial services segment, which includes Safaricom, boasted approximately 70.6 million customers, transacting an impressive volume of US$1 billion per day.

The company’s focus on effective cash flow management resulted in an 18.3% increase in free cash flow year-on-year. This achievement highlights Vodacom Group’s commitment to optimizing its capital allocation and driving operational efficiency.

In line with its commitment to delivering value to shareholders, Vodacom Group declared a full-year dividend of 670 cents per share. Additionally, the company announced a final dividend of 330 cents per share, consistent with its new dividend policy.

Analyzing the group’s statutory performance measures, the report reveals a 16.0% increase in revenue, reaching R119.2 billion compared to R102.7 billion in the previous year. Normalized service revenue grew by 3.5% to R93.7 billion (excluding Vodafone Egypt). Net profit from associates and joint ventures experienced a modest decline of 14.7%, reaching R2.6 billion, while operating profit increased by 3.6% to R29.3 billion.

The company reported a net profit of R18.1 billion, reflecting a slight increase of 2.1% compared to the previous year. Earnings per share and headline earnings per share both amounted to 948 cents, showing a marginal decrease of 6.4%.

In addition to statutory measures, Vodacom Group achieved strong results in various performance indicators. EBITDA rose by 13.2% to R45.1 billion (or 3.6% excluding Vodafone Egypt), with an EBITDA margin of 37.9%. Capital expenditure increased by 12.6% to R16.5 billion, while capital intensity stood at 13.8%.

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