Vodacom has reported that the acquisition of a 55% share in Vodafone Egypt increased the group’s profitability for the quarter ending in December 2022.
This week, Vodacom Group CEO Shameel Joosub stated, “The third quarter of our current fiscal year is the first set of results that includes revenues from what we expect to be a transformative transaction for the group — our acquisition of a 55% stake in Vodafone Egypt.”
In December of last year, Vodacom closed the largest transaction in company history, worth R43,6 billion. Following the completion of the purchase, Vodafone’s stake in the Vodacom group rose from 60.5% to 65.1%.
Vodacom stated, “We anticipate that the acquisition will improve our return and growth prospects, including our medium-term service revenue and earnings outlook.”
On December 8, 2022, Vodacom consolidated Vodafone Egypt into their earnings. Vodafone Egypt provided more than R1.8 billion to group service revenues and was a major contributor, along with currency gains, to the 16% increase in Vodacom’s service revenues to R24 billion. Due to the acquisition of Vodafone Egypt and the rand’s depreciation against foreign currencies, Vodacom’s revenue for the quarter ending in December 2022 grew by 15% to R30.7 billion.
The fastest-growing contributor to the group’s new offerings is financial services. Vodacom’s financial services revenue increased by 30.6% to R2.6 billion, mostly as a result of increased demand for M-Pesa platform services throughout its worldwide portfolio and double-digit growth in insurance policy and airtime advance sales in South Africa.
Vodacom’s foreign operations increased by 18% to R7 billion, which the company attributes to its emphasis on financial inclusion and increased capital expenditures. M-Pesa revenue surged by 34%, while data revenue jumped by 33%. M-Pesa completed over R6.4 trillion worth of transactions over the past year, an increase of 17%, and remains Africa’s largest mobile money platform by transaction value.
Vodacom is a minority stakeholder in an Ethiopian mobile telecom license-holding consortium led by Safaricom. By mid-November, the number of active Safaricom Ethiopia users had topped one million. By December 31, the company’s network coverage had increased to 21 cities in Ethiopia, and it is on schedule to reach 25 cities by April 2023.
In an additional development, Vodacom purchased spectrum for telecommunications in Tanzania and Mozambique.
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