Vodacom 1Q18 Group Revenue Rises; International Operations Hit by Forex

By Razak Musah BabaFeaturesDow Jones Newswires

Vodacom Group Ltd. (VOD.JO) Thursday reported 3.9% group revenue growth during the first quarter of fiscal 2018 but said its international operations results were impacted by the effect of adverse currency conversions.

South Africa's largest mobile operator by subscribers said group revenue rose to 20.7 billion South African rand ($1.54 billion), up 3.9% from the year earlier and up 7.7%, excluding currency effects.

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The group's service revenue rose 1.7% to ZAR17.10 billion during the quarter, or 5.9% higher on a normalized constant currency basis.

International revenue declined 8.2% and service revenue declined 8.0% during the period from a year earlier. Normalized for currency fluctuations, revenue and service revenue grew 8.0%.

The solid performance the group delivered in fiscal 2017 continued into the first quarter of the current financial year. In South Africa, revenue growth accelerated to 7.8%, aided by increased smartphone device sales, Chief Executive Officer Shameel Joosub said.

"We sustained South African service revenue growth of 5.6%, underpinned by the consistent and significant investment in our network infrastructure and IT systems, aimed at further enhancing the customer experience," Mr. Joosub said.

Although the International operations have turned the corner, currency volatility is still negatively impacting results, the chief executive said.

"We remain cognizant of the weaker economic conditions that prevail in South Africa as well as some of our larger markets and have put measures in place should these conditions deteriorate materially in these markets," Mr. Joosub added.

-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

July 20, 2017 02:16 ET (06:16 GMT)