Vodacom Group reported a 2.1 percent increase in full-year revenue to ZAR 77.3 billion from ZAR 75.7 billion in 2014. Excluding the impact of a 50 percent cut in MTRs in South Africa, group revenue in the year to March increased by 4.8 percent. EBITDA declined by 1.5 percent to ZAR 26.9 billion, hurt by negative forex effects and a one-time charge of ZAR 405 million to write down operations in the Democratic Republic of Congo. Headline earnings per share decreased by 4.0 percent to ZAR 8.60 from ZAR 8.96 in 2014, and net profit fell 8.5 percent to ZAR 12.5 billion.
CEO Shameel Aziz Joosub said average per-minute call prices were down nearly one fifth, after mobile termination rates were cut in half. As a result, service revenue in South Africa fell 2.7 percent to ZAR 47.0 billion. International service revenue was still up 10.0 percent to ZAR 15.3 billion. Active customers increased by 7.2 percent to 61.6 million on 31 March. Data revenue grew by a quarter in South Africa and was up by a third in the international operations. Following an expansion of 3G coverage and the launch of LTE, capital expenditure increased 22.5 percent last year to ZAR 13.3 billion, leading to a 41 percent drop in free cash flow to ZAR 7.8 billion.
The group said it was disappointed by a regulatory delay to approval of its proposed acquisition of Neotel, the Tata Communications unit that it agreed to buy a year ago for ZAR 7 billion. The operator expects the impact of lower MTRs to reduce in the coming year, while its accelerated capex programme will support its growth initiatives, including data services and more fixed and enterprise services. Vodacom maintained its medium-term guidance of low single-digit service revenue growth, mid-single digit EBITDA growth and capital expenditure at 14-17 percent of group revenue. The guidance excludes the impact of acquisitions.
