Voda profit rises 28pc on M-Pesa, data growth

DAR ES SALAAM: VODACOM Tanzania Plc has reported a strong operating profit growth for the six months ending September, underpinned by double-digit gains in M-Pesa, data and digital services, as the telecom giant continues its ambitious network modernisation drive.

The company’s operating profit rose by 27.8 per cent to 105.3bn/-, buoyed by a 24 per cent jump in total revenue to 905.3bn/- from 730.2bn/- a year earlier.

According to the telecom’s recently released financial statement, earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 44.6 per cent to 319.8bn/-, lifting the EBITDA margin to 35.3 per cent from 30.3 per cent last year, a clear sign of stronger operational efficiency.

Vodacom attributed the robust results to service revenue growth of 23.1 per cent to 883.9bn/-, reflecting the combined impact of an 18.9 per cent increase in customer numbers and higher average revenue per user (ARPU).

Additionally, revenue diversification beyond mobile voice, including M-Pesa, fixed, digital and Internet of Things (IoT) services also played a key role in the improved performance.

M-Pesa revenue surged by 28.1 per cent to 351.2bn/- , contributing nearly 40 per cent of service revenue. The company said the growth reflected strong customer uptake of advanced M-Pesa services, whose contribution to total M-Pesa revenue expanded by 5.4 percentage points to exceed 60 per cent.

“This strong performance is a testament to the effectiveness of our commercial strategy,” Vodacom said, citing 15.1 per cent customer growth and double-digit gains in ARPU.

Mobile data revenue jumped 31.2 per cent to 256.2bn/-, driven by a 32 per cent increase in data traffic supported by sustained network investment and wider smartphone adoption.

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Smartphone users grew 34.3 per cent, while average data usage per customer also registered double-digit growth.

Fixed data revenue rose by 29.4 per cent to 25.9bn/- as the firm continued connecting homes and businesses under its broadband expansion programme.

Vodacom said it maintained strong financial discipline, implementing cost transformation measures that saved 52.7bn/- during the period.

Direct expenses increased by 16.5 per cent to 275.9bn/- in line with revenue growth, while operating expenses rose 13.1 per cent to 306.7bn/-, reflecting both network expansion and temporary costs linked to the ongoing modernisation initiative.

The company noted that the modernisation project, which involves upgrading more than 1,400 network sites, has led to higher depreciation and amortisation costs, up 54.8 per cent, but the longterm benefits are expected to outweigh these short-term expenses.

The telecom said excluding the impact of the project, Vodacom’s operating profit would have been 82.7bn/- higher, representing a 128.2 per cent increase.

Capital expenditure stood at 150.8bn/-, equivalent to 16.7 per cent of revenue, channelled mainly into expanding broadband coverage, deploying 229 new 4G sites and enhancing IT infrastructure to improve customer experience and efficiency.

Earnings per share (EPS) for the six-month period declined slightly by 1.3 per cent to 18/56, but Vodacom said that excluding modernisation-related costs, underlying EPS grew 136.2 per cent, supported by strong revenue and cost efficiencies. Chief Executive Officer Philip Besiimire said the results reflect the company’s resilience and continued focus on empowering Tanzanians through technology.

“As we continue connecting Tanzanians for a better future, we aim to accelerate digital inclusion, ensure data privacy and build a stronger Vodacom for the next 25 years and beyond.”