Headline EPS declined 5.5 percent to ZAR 4.15, mainly the result of termination rate cuts in South Africa, as well as increased depreciation as a result of accelerated capital investments. EBITDA declined 1.7 percent to ZAR 12.99 billion, and the EBITDA margin contracted 1.4 percent points to 34.6 percent. Capital expenditure rose 21.3 percent from a year ago to ZAR 5.88 billion.
The company said it expects conditions to remain challenging in the short-term, particularly in South Africa where the continued impact of lower mobile termination rates, constrained consumer spend, and intense competitive pressure are all factors. In the international markets, particularly Tanzania and the DRC, continued pricing pressure is also likely to have an impact. However, Vodacom said positive trends in the adoption of smart devices and data usage will help to offset this, as will the ongoing focus on reducing operating expenditure.
In South Africa, first-half revenue grew by 0.1 percent to ZAR 30.17 billion, supported by continued growth in handset sales and 21.6 percent growth in data revenues. Total service revenues were down 1.3 percent from a year ago, and EBITDA fell 5.1 percent to ZAR 10.84 billion. The active customer base increased 8.2 percent from a year ago to 32.61 million, and data customers were up 17.4 percent to 16.68 million. The operator had over 94 percent 3G coverage at the end of the period, and the number of LTE sites more than doubled in the past six months to 1,942 at the end of September.
At the International operations, service revenue grew 13.0 percent to ZAR 7.37 billion, and EBITDA increased 21.1 percent to ZAR 2.19 billion. Active customers rose 19.8 percent year-on-year to 28.4 million. In both Tanzania and DRC, Vodacom added around 1 million new customers in the past six months. Over 32 percent of customers were actively using data services at the end of the period.
