The Vodacom Group (Pty) Limited, "Vodacom", today released impressive results for the year ended 31 March 2005, including the biggest dividend pay out to shareholders of R3.4 billion in the history of the company, a 61.9% increase on last year.
Alan Knott-Craig, Chief Executive Officer, for the Vodacom Group said:
"The extraordinary growth in South African market share has secured our position as South Africa`s leading cellular network with 56% of the market. We have had an excellent year with productivity increases across the board. We are particularly pleased to be able to return R3.4 billion to our shareholders."
Financial highlights include:
Table
Shareholder returns remain a key focus area and the Board has determined that the most appropriate use of the excess cash available is to return it to shareholders. The Group has sufficient funding flexibility to actively pursue future growth opportunities. The net debt to equity position is 31.7% (2004: 29.5%) after adjusting for the final dividend that was distributed after the financial year-end.
Revenue increased by 19.5% to R27.3 billion (2004: R22.9 billion), which has translated into a 23.9% increase in operating profit to R6.5 billion (2004: R5.2 billion). Excluding the R268.4 million impairment of the Group`s Mozambique assets, the operating profit growth was 29.0%.
Earnings excluding impairments before interest, taxation, depreciation and amortisation "EBITDA" increased 23.6% to R9.6 billion (2004: R7.8 billion) and the EBITDA margin increased to 35.1% (2004: 34.0%).
The total cumulative capital expenditure increased by 18.2% to R24.4 billion (2004: R20.7 billion). During the financial year, R3.4 billion (2004: R2.8 billion) was spent on the cellular network infrastructure and related IT and billing systems.
In keeping with Vodacom`s strategy of being first to market with innovative new products and services, the network was the first to introduce state-of-the-art 3G technology for data to the South African market: "We invested R400 million in rolling out our 487 3G base stations by December 2004. Vodacom currently has 882 3G base stations in our network - an incredible achievement, even by world standards," Knott-Craig said.
The total customer base grew by 38.0% to 15.5 million, of which 12.8 million are in South Africa. Customer growth in the DRC was 54.0% to 1.0 million and in Tanzania the growth was a phenomenal 75.6% to 1.2 million customers.
Knott-Craig continued: "Operationally it has been a powerful year with the successful roll-out of our 3G network and the strong market take up of the products and services offered through our Vodafone partnership."
Once again, Vodacom were first to market with mobile e-mail through BlackBerry, the introduction of the Vodafone Mobile Connect Card or mobile office, and the latest offering, Vodafone live! - all of which have enjoyed positive market reaction.
Vodacom`s African operations are now all profitable, with the exception of Mozambique, which is still in its start up phase. Competition in Africa remains fierce, but Vodacom`s strong brand and excellent product offering enabled it to compete effectively.
Commenting on last week`s announcement of a joint bid with Virgin for the controlling stake in Nigerian company, V-Mobile, Knott-Craig said: "We have always been explicit about our intention to enter the Nigerian market and take control of V-Mobile. If we are successful, we will control the investment through a subsidiary in which Virgin will have a minority stake. As shareholders, both Virgin and Vodacom believe we have delivered a more compelling offer to V-Mobile. We are able to capitalise on the collective strengths of both companies which should be of benefit to V-Mobile`s shareholders, staff and customers."
During the review period the Vodacom Service Provider Company (Pty) Ltd was restructured to become a subsidiary of Vodacom (Pty) Ltd in order to unlock operational and financial efficiencies and allow for improved communication and decision making. The restructuring became effective April 2005 and does not impact Vodacom`s licence or licence commitments.
Knott-Craig concluded: "We believe that we have a critical role to play in bridging the digital divide, and indeed that we have already contributed in a significant manner. Remaining focused on our core business in South Africa, whilst displaying intuitive innovation and courage in leading the way in introducing new technologies, will ensure a continued growth scenario for Vodacom."
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