Vodacom Targets Double-digit Service Revenue Growth By 2028

Vodacom, majority-owned by UK-based Vodafone, said headline earnings per share rose by 1.3% to 857c in the year ended 31 March, on a stronger second-half performance, though gains were capped by significant currency volatility.

Group service revenue slipped 0.1% in rand terms to R120.7bn ($6.7bn).

However, it was up 11.2% on a normalised basis, reflecting a 45.2% surge in revenue from Egypt in local currency terms and sturdy growth in its "beyond mobile services" across the group, which include fibre, digital and financial services.

Normalised basis calculation adjusts for foreign currency fluctuations, hyperinflation accounting and excludes the impact of mergers, acquisitions and disposals.

As part of its vision for 2030, Vodacom upgraded its target for service revenue on a normalised basis to double-digit growth by 2028, from a high single-digit rise.

Group CEO Shameel Joosub said on a media call that the growth will be driven by expectations of more stability in the currencies the group is exposed to and improved economic growth.

"I think all things considered, and the way we're executing on the different parts by growing customers, diversifying our beyond mobile ambitions, specifically in the fintech and fibre space, I think bodes well for this next period," Joosub said.

In February, Vodacom also upgraded its earnings before interest, tax, depreciation and amortization (EBITDA) target upward to double-digit growth.

Its EBITDA for the reporting period fell 1.1% to R55.5bn but grew 7.8% on a normalised basis.

On the outlook for the group's business portfolios, Joosub said he expected mid-single-digit growth in its domestic market, a double-digit rise in its international business and growth in Egypt "in the 20s".

Vodacom also expects group service revenue contribution from "beyond mobile" services to increase to 30% by 2030 from 21%, as it introduces advanced fintech services in Egypt.