Vodacom posts 1.3% increase in full-year HEPS

Vodacom, one of the leading telco giants, has recently unveiled its full-year results for the financial year ending on 31 March 2025. The company reported solid second-half momentum, highlighted by growth in financial services, and a bold investment plan on the horizon. Vodacom Group CEO, Shameel Joosub, sat down with CNBC Africa to dissect the results and shed light on the future of the telecommunications powerhouse. Joosub kicked off the conversation by addressing a key highlight of their performance - a 5.1% increase in the full-year dividend despite challenges posed by currency volatility and flat reported service revenue. He attributed this positive trajectory to the receding impact of currency devaluations in key markets like Egypt and Ethiopia. Joosub expressed optimism about the future, citing the success of their diversification strategies into mobile financial services, fibre, IoT, and digital services, which are starting to yield positive outcomes. The discussion then turned to Egypt, Vodacom's standout market with robust growth rates. Joosub credited their top position in Egypt's telecom sector to a strong brand presence and a focus on enhancing customer experience. The company has been making significant strides in areas such as fibre, fintech, and content, reflected in an impressive 45% margin business and a remarkable 99% growth in net profit. While Egypt shone brightly, South Africa faced some challenges, particularly due to pricing shifts in wholesale contracts from competitors like Telkom and Salsee. Joosub highlighted a rebound in the prepaid segment and strong growth in enterprise, contracts, and financial services in the second half of the year. Despite the headwinds, he remains optimistic about South Africa's future performance, buoyed by positive momentum and anticipated GDP growth. Joosub delved deeper into Vodacom's financial services prospects, spotlighting M-Pesa's phenomenal $450 billion transaction volume and the upward trajectory of their fintech revenue. The company aims to leverage successful products across markets and enhance its offerings, particularly in areas like insurance and international money transfer, while focusing on expanding its merchant play. The CEO also discussed Vodacom's strategic moves, including an appeal against the competition tribunal's decision to block a major deal. He emphasized the significance of the transaction for South Africa's fibre ambitions, expressing disappointment in the regulatory stance. Joosub highlighted the importance of network sharing with competitors like MTN to drive cost efficiency and resilience, citing collaborative efforts to optimize resources and expand connectivity. Looking ahead to Vodacom's vision 2030, Joosub outlined upgraded medium-term targets of double-digit EBITDA and service revenue growth. The company aims to capitalize on diversified revenue streams from markets like Egypt and Ethiopia, while focusing on customer growth in key regions like the DRC and Tanzania. A key focus lies on expanding their financial services customer base and deepening their presence in the telco and fintech segments to achieve ambitious targets. Joosub concluded the interview by addressing Vodacom's dividend payout policy, highlighting the company's commitment to striking a balance between rewarding shareholders and investing in future growth opportunities. He emphasized the importance of generating strong cash flows, returning profits to shareholders, and strategic partnerships to drive expansion initiatives across markets. Vodacom's unwavering focus on innovation, strategic partnerships, and customer-centric growth strategies sets the stage for a dynamic future in the telecom industry.