Vodacom Group upgraded its medium-term operating growth target to mid-to-high-single digit on Tuesday after reporting a 3.7% jump in full-year earnings.

The operator said it upgraded its medium-term operating profit growth target from mid-single digit on improved growth prospects for its international business and Kenya’s Safaricom, which is part owned by Vodacom and Britain’s Vodafone Group.

Headline earnings per share rose to R9.80 in the 12 months ended 31 March, from R9.45 a year earlier. Vodacom, which is majority owned by Vodafone, declared a final dividend of R4.10/share, up 1.2%. Group revenue rose by 8.3% to R98.3-billion, supported by service revenue growth of 5.8%.

Service revenue growth was “underpinned by the recovery in our international portfolio in the second half of the year and strong growth from our prepaid and enterprise segments, financial services and other new services in South Africa”, Vodacom said.

In South Africa, service revenue grew by 7% on the back of increased data usage as people worked and had school from home, a summer rewards campaign and demand for financial services. These helped to offset numerous initiatives such as a R3-billion service revenue impact of lowering data pricing.

M-Pesa

Its international operations reported service revenue growth of 1.6%, with a stronger second half offsetting the significant impacts of Covid-19 earlier in the year, Vodacom said.

The international business took a R2-billion service revenue impact due to “zero-rating” or not charging peer to peer M-Pesa transactions.

M-Pesa, which is used to send money, save, borrow and make payments for goods and services, now processes US$24.5-billion/month in transaction value across the Vodacom’s international markets, including Safaricom, up 63.5%, it said. — Reported by Nqobile Dludla, (c) 2021 Reuters