| Tue 2 Feb 2010, 8:00 | | VOD - Vodacom Group Limited - Trading statement for the quarter ended |
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VOD
VOD
VOD - Vodacom Group Limited - Trading statement for the quarter ended
31 December 2009
Vodacom Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/005461/06)
Share code VOD
ISIN ZAE000132577
("Vodacom Group")
TRADING STATEMENT FOR THE QUARTER ENDED 31 DECEMBER 2009
Key highlights
Group
* 6.0% growth in Group revenue to R15 425 million
* 33.2% growth in Group data revenue to R1 188 million
* 9.5% increase in Group mobile customers (1) to 40.5 million
South Africa
* 7.5% increase in revenue to R13 439 million
* 35.2% growth in data revenue to R1 160 million
* 27.1 million mobile customers, up 2.5% year on year
* Customer growth impacted by RICA (2)
International
* Improved market positioning
* 27.2% growth in mobile customers (1) to 13.4 million
* Revenue negatively impacted by Rand strength
* Increased usage through successful promotions
Pieter Uys, Chief Executive Officer, commented:
"This has been a positive quarter for Vodacom, featuring solid overall revenue
growth and continued progress in building our data business. Despite a
challenging economic environment and the continued impact from RICA, our South
African business posted a 7.5% increase in revenue. The actions we have taken
in our international businesses have shown positive results in the form of
improved market positioning. Cost management programmes are also gaining
momentum and should provide the basis for improved margin management in the year
ahead. Careful allocation of capital to investment projects has resulted in
continued strong growth in cash flows."
(1) Group and international customer growth normalised for the change in the DRC
disconnection policy from 215 to 90 inactive days
(2) Regulation of Interception of Communications and Provision of Communication-
Related Information Act
Group
Group revenue for the three months ended 31 December 2009 increased by 6.0% year
on year to R15 425 million with continued robust performance in South Africa
offsetting revenue declines in Tanzania and the Democratic Republic of Congo
("DRC"). Revenue growth was positively affected by the Gateway acquisition (4.5
percentage points), offset by a negative impact from exchange rate translation
(3.8 percentage points) and excise duties (0.5 percentage points). On a
normalised basis Group revenue and service revenue increased by 5.8% and 5.1%,
respectively. Gateway`s reported revenue was also impacted by currency
translation but in US dollars remained flat quarter on quarter at approximately
US$92 million.
Group mobile customers increased 7.1% (normalised 9.5%) from 31 December 2008 to
40.5 million at 31 December 2009. During the quarter the Group customer base
declined by 1.1 million, primarily as a result of RICA in South Africa and a
change in the disconnection policy in the DRC, offset by growth in the other
operations. The South African mobile operations contributed 67.0% (30 September
2009: 69.5%) of normalised Group total mobile customers.
South Africa
Revenue growth in South Africa remained robust at 7.5% to R13 439 million,
reflecting customer growth of 2.5% to 27.1 million and the increasing
contribution of data revenue. Data revenue growth accelerated in the quarter to
35.2% due to increased penetration of mobile PC connectivity and mobile internet
usage, with broadband customers increasing 48.8%.
Contract service revenue growth improved in the quarter due to a 12.5% increase
in the contract customer base to 4.3 million.
Prepaid service revenue growth slowed as a result of a 1.3 million reduction in
prepaid customers in the quarter to 22.6 million following the implementation of
RICA, coupled with December price promotions. Gross connections have improved
steadily from approximately 260 000 in August 2009 to approximately 760 000 in
December 2009 supported by increasing consumer and channel awareness. While
churn increased 2.1 percentage points on the prior year quarter largely due to
RICA, it is expected to trend downwards in 2010.
It is expected that mobile termination rates will be reduced from as early as 1
March 2010.
International
Revenue growth in the international mobile operations declined 33.4% to R1 394
million, with unfavourable foreign exchange translation contributing 23.7
percentage points of the reduction. Excluding the foreign currency translation
impact and excise duties, normalised revenue declined 6.3%. The decline was
largely due to promotions aimed at improving competitiveness in the key markets,
coupled with continued economic pressures. In local currencies, the Tanzania and
DRC service revenue decline stabilised, while growth in Mozambique and Lesotho
remained strong. Assertive steps taken during the quarter have improved the
relative market performance, particularly in Tanzania and the DRC.
Reported international customer growth of 17.9% understates the actual growth of
27.2% due to the change in the DRC disconnection policy from 215 to 90 inactive
days. This policy change resulted in approximately one million disconnections in
the DRC. Tanzania customer growth of 28.4% was fuelled by new promotional
activity and Mozambique and Lesotho posted strong customer growth of 61.1% and
30.9%, respectively.
The quarterly information has not been audited or reviewed by Vodacom`s external
auditors.
Revenue for the quarters ended
Rm December September December Year on Quarterly
2009 2009 2008 year % change
% change
South Africa 13 439 12 264 12 503 7.5 9.6
International 1 394 1 507 2 093 (33.4) (7.5)
Gateway 693 729 - n/a (4.9)
Corporate and eliminations (101) (129) (40) (152.5) 21.7
Total revenue 15 425 14 371 14 556 6.0 7.3
Key performance indicators for the quarters ended
South Africa
December September December Year on Quarterly
2009 2009 2008 year % change
% change
Customers (thousands)(1) 27 102 28 204 26 450 2.5 (3.9)
Prepaid 22 636 23 926 22 450 0.8 (5.4)
Contract 4 349 4 159 3 867 12.5 4.6
Community services 117 119 133 (12.0) (1.7)
Churn (%)(2) 41.5 35.6 39.4
Prepaid 47.7 40.3 44.8
Contract 8.8 8.2 9.9
Traffic (millions of 6 655 6 745 6 402 4.0 (1.3)
minutes)(3)
Outgoing 4 632 4 760 4 382 5.7 (2.7)
Incoming 2 023 1 985 2 020 0.1 1.9
Total ARPU (Rand per 140 125 140 - 12.0
month)(4)
Prepaid 74 64 74 - 15.6
Contract 455 461 473 (3.8) (1.3)
Community services 427 421 508 (15.9) 1.4
International
December September December Year on Quarterly
2009 2009 2008 year % change
% change
Customers (thousands)(1) 13 352 13 384 11 321 17.9 (0.2)
Tanzania 6 878 6 260 5 355 28.4 9.9
DRC(5) 3 522 4 404 4 042 (12.9) (20.0)
Mozambique 2 312 2 134 1 435 61.1 8.3
Lesotho 640 586 489 30.9 9.2
Churn (%)(2)
Tanzania 43.3 48.6 41.0
DRC(5) 157.5 57.1 46.2
Mozambique 61.1 66.1 73.1
Lesotho 19.5 20.8 21.1
Total ARPU (Rand per
month)(4)
Tanzania(6) 28 31 54 (48.1) (9.7)
DRC 35 39 70 (50.0) (10.3)
Mozambique 27 34 51 (47.1) (20.6)
Lesotho 73 68 75 (2.7) 7.4
Total ARPU (local
currency)(4)
Tanzania (Tanzanian 5 060 5 246 7 191 (29.6) (3.5)
shilling)(6)
DRC (USD) 4.7 4.9 7.1 (33.8) (4.1)
Mozambique (Metical) 109 119 133 (18.0) (8.4)
Historical key performance indicators for the quarters ended
Revenue
December September June March December September June
Rm 2009 2009 2009 2009 2008 2008 2008
South Africa 13 439 12 264 12 107 12 420 12 503 11 637 11 173
International 1 394 1 507 1 458 1 673 2 093 1 751 1 582
Gateway 693 729 803 808 - - -
Corporate and (101) (129) (64) (105) (40) (31) (22)
eliminations
Total revenue 15 425 14 371 14 304 14 796 14 556 13 357 12 733
South Africa
December September June March December September June
2009 2009 2009 2009 2008 2008 2008
Customers 27 102 28 204 28 735 27 625 26 450 25 245 24
(thousands)(1 891
)
Prepaid 22 636 23 926 24 578 23 561 22 450 21 391 21
138
Contract 4 349 4 159 4 039 3 946 3 867 3 735 3 643
Community 117 119 118 118 133 119 110
services
Churn (%)(2) 41.5 35.6 34.1 36.5 39.4 43.9 40.6
Prepaid 47.7 40.3 38.4 40.9 44.8 50.1 46.0
Contract 8.8 8.2 9.2 10.5 9.9 9.8 9.6
Traffic 6 655 6 745 6 896 6 189 6 402 5 997 5 796
(millions of
minutes) (3)
Outgoing 4 632 4 760 4 966 4 225 4 382 4 068 3 908
Incoming 2 023 1 985 1 930 1 964 2 020 1 929 1 888
Total ARPU 140 125 123 129 140 135 130
(Rand per
month)(4)
Prepaid 74 64 64 65 74 67 64
Contract 455 461 444 460 473 482 481
Community 427 421 427 471 508 572 597
services
International
December September June March December September June
2009 2009 2009 2009 2008 2008 2008
Customers 13 352 13 384 12 571 11 989 11 321 10 444 9 672
(thousands)(1
)
Tanzania 6 878 6 260 5 917 5 667 5 355 4 931 4 495
DRC(5) 3 522 4 404 4 182 4 170 4 042 3 776 3 454
Mozambique 2 312 2 134 1 925 1 634 1 435 1 287 1 302
Lesotho 640 586 547 518 489 450 421
Churn (%)(2)
Tanzania 43.3 48.6 47.9 43.3 41.0 43.4 45.0
DRC(5) 157.5 57.1 59.8 48.8 46.2 52.2 55.8
Mozambique 61.1 66.1 48.3 59.1 73.1 81.4 64.1
Lesotho 19.5 20.8 20.0 18.2 21.1 21.4 18.5
Total ARPU
(Rand per
month)(4)
Tanzania(6) 28 31 35 43 54 51 48
DRC 35 39 39 53 70 67 64
Mozambique 27 34 36 44 51 40 36
Lesotho 73 68 65 67 75 69 68
Total ARPU
(local
currency)(4)
Tanzania 5 060 5 246 5 511 5 729 7 191 7 641 7 432
(Tanzanian
shilling)(6)
DRC (USD) 4.7 4.9 4.7 5.2 7.1 8.6 8.2
Mozambique 109 119 114 117 133 122 112
(Metical)
Notes:
1. Customer totals are based on the total number of customers registered on
Vodacom`s network, which have not been disconnected, including inactive
customers, at the end of the period indicated.
2. Churn is calculated by dividing the annualised number of disconnections
during the period by the average monthly total reported customer base
during the period.
3. Traffic comprises total traffic registered on Vodacom`s network, including
bundled minutes, promotional minutes and outgoing international roaming
calls, but excluding national roaming calls, incoming international roaming
calls and calls to free services.
4. Total ARPU is calculated by dividing average monthly recurring revenue by
the average monthly total of reported customers during the period. Total
ARPU excludes revenue from equipment sales and non-service revenue.
Prepaid, contract and community services ARPU only includes recurring
revenue generated from Vodacom customers.
5. DRC changed its disconnection policy from 215 to 90 inactive days. Prior
period numbers have not been restated. Normalised DRC customer growth is
9.6% and churn is 78.1% for the quarter ended 31 December 2009.
6. ARPU numbers have been restated. Excise duty is now netted off against
revenue in line with Group accounting policies.
Average quarterly exchange rates
December Septembe Year on Quarterly
2009 r December year % change
2009 2008 %
change
USD/ZAR 7.51 7.81 9.91 (24.2) (3.8)
ZAR/MZN 3.92 3.50 2.48 58.1 12.0
ZAR/TZS 177.51 169.43 129.35 37.2 4.8
EUR/ZAR 11.09 11.16 13.04 (15.0) (0.6)
Investor Relations Media Relations
Belinda Williams Richard Boorman
+27 11 653 5195 +27 11 653 5794
2 February 2010
Sponsor: UBS South Africa (Pty) Ltd
Forward-looking statements
This announcement which sets out the trading statement for Vodacom for the
quarter ended 31 December 2009 contains "forward-looking statements" with
respect to the Group`s financial condition, results of operations and businesses
and certain of the Group`s plans and objectives. In particular, such forward-
looking statements include statements relating to: the Group`s future
performance; future capital expenditures, acquisitions, divestitures, expenses,
revenues, financial conditions, dividend policy, and future prospects; business
and management strategies relating to the expansion and growth of the Group; the
effects of regulation of the Group`s businesses by governments in the countries
in which it operates; the Group`s expectations as to the launch and roll out
dates for products, services or technologies; expectations regarding the
operating environment and market conditions; growth in customers and usage; and
the rate of dividend growth by the Group.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as "will", "anticipates", "aims",
"could", "may", "should", "expects", "believes", "intends", "plans" or
"targets". By their nature, forward-looking statements are inherently
predictive, speculative and involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future, involve known
and unknown risks, uncertainties and other facts or factors which may cause the
actual results, performance or achievements of the Group, or its industry to be
materially different from any results, performance or achievement expressed or
implied by such forward-looking statements. Forward-looking statements are not
guarantees of future performance and are based on assumptions regarding the
Group`s present and future business strategies and the environments in which it
operates now and in the future.
Date: 02/02/2010 08:00:01 Produced by the JSE SENS Department.
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