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Vodacom Group

Vodacom Group Limited interim results for the six months ended 30 September 2018

Monday, 12 November 2018

Highlights

  • Group service revenue up 6.1% (5.8%*) to R36.8 billion#; and Group revenue increased 5.6% (5.4%*) to R44.4 billion#.
  • We added 4.8 million customers in the six months, up 10.7%, comprising 2.5 million in South Africa and 2.3 million in our International operations. Safaricom added 373 000 customers. In combination, we now serve over 109 million customers across the Group.
  • South Africa service revenue increased 4.6% to R27.9 billion#, supported by strong customer growth.
  • International operations service revenue growth accelerated to 12.8% (11.4%*), boosted by strong growth in data and M-Pesa.
  • Group EBIT improved 3.4% (2.8%*) to R11.2 billion#, with strong improvement in our International operations.
  • Significant capital investment of R5.3 billion to expand our coverage and improve the quality of our networks.
  • Vodacom Lesotho, the first operator to launch a commercial 5G network in Africa.
  • Concluded our new Broad-based black economic empowerment (BEE) ownership deal, the largest deal of its kind in the ICT sector.
  • Safaricom contributed R1.4 billion# profit, after deducting the amortisation of fair valued assets and before minority interest.
  • Interim dividend per share of 395 cents, improved, despite issue of 114.5 million new shares for new BEE structure.
  Six months ended 30 September   % change  
Rm 2018
IFRS 15
2018
IAS 18#
  2017
IAS 18
  IAS 18   IAS 18
Normalised*
 
Revenue 42 707 44 364   41 995   5.6   5.4  
Service revenue 34 552 36 765   34 654   6.1   5.8  
EBITDA 16 534 16 468   15 731   4.7   4.1  
EBIT 11 263 11 197   10 830   3.4   2.8  
Net profit from associate and joint ventureΔ 1 345 1 361   349   >200.0      
Net profit 6 789 6 756   6 712   0.7      
Capital expenditure 5 334 5 334   5 378   (0.8)      
Operating free cash flow 7 074 7 074   6 311   12.1      
Interim dividend per share (cents) 395 n/a   390   1.3      

Following the prospective adoption of IFRS 15: Revenue from Contracts with Customers on 1 April 2018, the Group’s results for the six months ended 30 September 2018 are on an IFRS 15 basis, whereas the results for the six months ended 30 September 2017 are (as previously reported) on an IAS 18 basis. Comparisons between the two bases of reporting are not meaningful and to ensure appropriate disclosure during the period of transition onto IFRS 15, results for the six months ended 30 September 2018 has been disclosed on both an IFRS 15 and IAS 18 basis. Our commentary describing our operating performance in the Operating Review has been provided solely on an IAS 18 basis. The accounting standard applied is clearly marked in the heading of relevant columns in the news release. To aid in the understanding of the transition from IAS 18 to IFRS 15, we have provided commentary on the main differences between the two standards on page 9 and 10. Further disclosure is also included in Note 2: Change in accounting policies and in Note 3: Segment analysis of the condensed consolidated interim financial statements for the six months ended 30 September 2018.

Shameel Joosub, Vodacom Group CEO commented:

Following on from last year’s extraordinary year for Vodacom, we delivered two strategic milestones during the first half of this year. In September, we concluded our second BEE transaction under the YeboYethu umbrella to replace the highly successful R7.5 billion deal launched in 2008. Valued at R16.4 billion, the new scheme is the biggest ever in the Telecommunications industry

Notes:

Certain financial information presented in this results announcement constitutes pro-forma financial information in terms of the JSE Listings Requirements. The applicable criteria on the basis of which this pro-forma financial information has been prepared is set out in the supplementary information on pages 25 to 28. The pro-forma financial information includes:

  • Financial information, on a comparable IAS 18 basis, for the six months ended 30 September 2018, marked as ‘#’ in this document. The IAS 18 financial information is based on the condensed consolidated interim financial statements of Vodacom Group Limited for the six months ended 30 September 2018.
  • Amounts marked with an * in this document, represent normalised growth which presents performance on a comparable IAS 18 basis. This excludes merger and acquisition activity where applicable and adjusting for trading foreign exchange and foreign currency fluctuation on a constant currency basis (using the current six months as base).
  • Amounts marked with ‘¥’ in this document represents HEPS growth adjusted for the BEE and Safaricom transaction, disclosed in a reconciliation in the pro-forma information on page 28.

The pro-forma financial information has not been audited or reviewed or otherwise reported on by external auditors.

All growth rates quoted are year-on-year and refer to the six months ended 30 September 2018 compared to the six months ended 30 September 2017, which are based on IAS 18 accounting principles, unless stated otherwise.

Δ On 7 August 2017, the Group acquired an effective interest of 34.94% in Safaricom Limited which is accounted for as an investment in associate. Net profit from associate and joint venture includes attributable net profits and related amortisation of fair valued assets. Prior year results reflect two months of attributable net profit.

View full Interim results statement [674KB]



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