Vodacom has reported a 4% decline in full-year headline earnings per share as the mobile group faced big cuts in wholesale inter-network call rates, exchange range volatility and increased retail price competition in its key markets. Net profit declined by a sharp 8,5%.
However, the group said it achieved a “solid performance” in the fourth quarter, “ending the year with promising growth”.
For the full year, normalised group revenue fell by 1,1%, while normalised service revenue was down by 1%. Reported revenue climbed by 2,1% and service revenue was up by 0,2%.
Excluding the impact of a 50% cut in mobile termination (inter-network) rates in South Africa, reported group revenue climbed by 4,8% and service revenue by 3,4%.
Data was once again the growth story, with revenue up by 25% and active data customers up by 15,9% to 26,5m. Machine-to-machine customers reached 1,8m, an improvement of 18,5%.
Group active customers increased by 7,2% to 61,6m.
Operating margins came under pressure, with group earnings before tax, interest, depreciation and amortisation (Ebitda) falling by 1,5%. Ebitda margin was 34,8%, though Vodacom said there was a strong recovery in the second half in South Africa.
Capital expenditure soared by 23,4% to reach R13,3bn, in line with previously provided guidance. Operating free cash flow plunged by 27,9% as the group ramped up investment in its network.
During the year, there was a 17,7% reduction in the blended average effective price per minute for calls, while the average effective price per megabyte of data fell by 24,1%.
The group said that at the end of March, it had 11,6m smart devices (smartphones, tablets and modems) actively using its South African network. This was boosted by the launch of Smart Kicka and Smart Tab, Vodacom’s low-cost branded devices.
Vodacom declared a final dividend of R4/share, bringing the total payout to shareholders for the 2015 financial year to R7,75.
“The improvement in fourth-quarter performance gives us cause for cautious optimism. The indications are we’ve pulled through a transformative period and conditions over the medium term look more favourable,” the group said. — © 2015 NewsCentral Media
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