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Vodacom Adds Sales, Customers Amid Heavy Network Spending

Loni Prinsloo

Vodacom Group Ltd. increased full-year sales and customer numbers after Africa’s biggest wireless carrier by market value expanded its network and sold more smartphones.

Sales rose 6.3 percent to 86.4 billion rand ($7 billion) and the number of subscribers in markets including South Africa, Tanzania and the Democratic Republic of Congo passed 100 million, the Johannesburg-based company said in a statement Monday. The acquisition of a stake in Kenya’s Safaricom Ltd. weighed on earnings but the one-time effect has been absorbed, Chief Financial Officer Till Streichert said on a call with reporters.

Vodacom announced the purchase of a 35 percent stake in Nairobi-based Safaricom from its parent Vodafone Group Plc a year ago to expand its sub-Saharan African operations and mobile-money offering, which is popular in countries with limited access to banks. Telecommunications companies see Africa as a high-growth market for data sales as technology becomes more accessible and less expensive.

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The shares rose as much as 1.3 percent before trading 1 percent lower at 155.37 rand as of 9:29 a.m. in Johannesburg. The stock is up 6.6 percent this year, while crosstown rival MTN Group Ltd. is down 8.4 percent.

Headline earnings per share were flat at 9.23 rand for the year through March, compared with an average analyst estimate of 9.27 rand. Vodacom lowered the full-year dividend to 8.15 rand a share from 8.30 rand.

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Vodacom has retained market leadership in all its territories, Chief Executive Officer Shameel Joosub said on a call with reporters. Looking ahead, he sees “renewed economic and political stability in South Africa” after President Cyril Ramaphosa ousted Jacob Zuma in February.

Vodacom invested 11.6 billion rand to expand its African network, mostly in South Africa, and maintained targets such as mid-single digit service revenue growth.

Updates with CFO comments in second paragraph.

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