Vodacom well on its way to reach 2030 growth target of 260 million customers

VODACOM’S 32% interim headline earnings growth reported Monday was at the lower end of guidance it revised days ago following the one-off payment to Kenneth Makate to settle the Please Call Me matter.

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Despite the settlement payment of an undisclosed amount, but now widely speculated to be close to R500 million, Vodacom still delivered “robust growth” - service revenue increased 13.6% for the six months to September 30 to R65.8 billion, which is above their five-year target of double-digit growth. Earnings before interest tax depreciation and amortisation in the South Africa business however fell by 5.3% to R8.76bn, due to the revenue performance and the one-off payment.

The settlement agreement reached last week arose after former employee Makate and Vodacom had been involved in legal action over the Please Call Me idea for 18 years, with Makate initially claiming R10bn for inventing the Please Call Me service, while Vodacom had put the figure closer to R50 million.

The interim dividend increased by 15.8% to 330 cents per share. The group served 223.2 million customers, a figure 8.6% higher on the same period a year before, and it includes 93.7 million financial services customers.

Group revenue was up 10.9% to R81.6bn. Earnings before interest, tax, depreciation and amortisation increased 14.7% to R30.5bn. Regional highlights included Egypt's 42.3% local currency service revenue growth, a stable performance in South Africa and a strong recovery from the International business.

CEO Shameel Joosub said an encouraging revenue trend in the first three months continued in the second quarter. Beyond mobile - including financial and digital services, fixed and IoT - contributed 21.8% of group service revenue, moving the group closer to its Vision 2030 target of exceeding 30%.