07 June 2023
Vodacom Group reported strong financial growth for the year ended 31 March 2023, despite facing headwinds from power supply issues in South Africa, startup costs of a new operation in Ethiopia, supply chain challenges, higher interest and inflation rates, and foreign exchange volatility.
Vodacom Group revenue grew 16% year-on-year (YoY) to 119.2 billion South African rand, positively impacted by the acquisition of Vodafone Egypt and rand depreciation against its basket of international currencies.
“The war in Ukraine, which followed hard on the heels of a global health crisis, resulted in supply-chain disruption and inflationary pressures. These factors have contributed to a higher cost of living, a sharp rise in interest rates and foreign exchange rate volatility across our markets,” said Vodacom Group CEO Shameel Joosub. “At the same time, we diversified and accelerated our growth profile by completing the acquisition of a 55% stake in Vodafone Egypt for R43.6 billion, the largest acquisition in the Vodacom Group’s history and one that expands our population reach to over 500 million people across Africa.”
Since consolidating Vodafone Egypt on 8 December 2022, it has contributed R8 billion to group service revenues.
“We are pleased to have delivered improved profitability in the second half despite ongoing economic headwinds, including power availability challenges in South Africa,” said Vodacom Group CFO Raisibe Morathi. “South Africa’s energy crisis has proven an important factor in shaping the financial year. Load shedding is a term that has become top of mind with us as management team and is a reference to the way available electricity is rotated in South Africa.”
South Africa’s energy crisis continued to cost the operator a significant sum. The company spent an incremental R300 million in operating costs in the year mostly on diesel. Vodacom has also spent R4 billion ‘on energy resilience capex’ over the last four years.
Group earnings before interest, tax, depreciation and amortization (EBITDA) grew 13.2% YoY, reflecting an improvement in second-half profitability. Group service revenue grew 17.2% YoY, or 7.2% excluding Vodafone Egypt, supported by data and financial services revenue growth. Financial services revenue increased 29.2% to R9.9 billion, contributing 10.5% to group service revenue.