Cellular communications group Vodacom has turned in a strong operational performance in the six months to September 2009, increasing its market share in its most important market of SA.
However, the good operational results were marred by a slump in net profit as a result of a R3,2bn impairment charge associated with its acquisition of Gateway and the reversal of a R551m deferred tax asset in the Democratic Republic of Congo (DRC).
Net profit fell 98,4% to R59m from same six-month period a year ago.
However, operationally the group’s results are strong. It increased its SA subscriber base by 11,7% to 28,2m. Group-wide, subscriber numbers climbed a healthy 16,5% to 41,6m.
The strong performance in SA suggests that Vodacom has made significant market share gains against its biggest rival, MTN. The latter recently reported that its subscriber numbers for the third quarter had fallen by 5%.
Vodacom says it has enjoyed continued strong demand for mobile broadband, with subscriber numbers climbing by more than 50% in SA. Group mobile data revenue rose by 30%.
International (non-SA) subscriber numbers grew by 28,2% to 13,4m. However, revenue declined by 11% to R3bn because of pressures in Tanzania and the DRC. Both countries felt the impact of weak economic conditions, intense competition and higher excise duties.
Mozambique and Lesotho both grew strongly.
The group says cash generation remained strong with operating free cash flow up 26,2% to R5,2bn. It has declared an interim dividend of R1,10/share. — Duncan McLeod, TechCentral