The Dar es Salaam Stock Exchange-registered telecommunication firm recorded a total of Sh1.03 trillion in revenues during the year to March 31, 2020, up from Sh1. 024 trillion during the year to March 31, 2019.
M-Pesa revenue grew by 7.4 percent while earnings from mobile data rose by 9.8 percent to effectively offset the impact of a 3.2 percent and 19 percent drop in mobile voice and mobile incoming revenue streams respectively on the company’s financial position.
M-Pesa brought Sh358.2 billion to Vodacom’s revenue coffers during the year to March 31, 2020 while mobile data brought in Sh180.8 billion.
There was also a slight increase in messaging revenues – to Sh42.4 billion from Sh41.4 billion last year – while revenue from incoming calls declined by 19 percent, to Sh53.2 billion.
The fall in mobile voice, the company says, explains a drop in Average Revenue Per User (Arpu) due to service barring to 2.9 million non-biometrically-registered customers as well as intense competitive pricing pressure.
“Our pleasing performance was achieved in the context of intense regulatory pressures, a highly-competitive market environment, and a softening in economic growth with a general reduction in consumer spend,” said Vodacom’s managing director, Mr Hisham Hendi.
The growth in revenue did not however translate into improved profitability as the company had to raise its expenses to accommodate the implementation of biometric registration and Covid-19 costs.
“Vodacom spent Sh21 billion on aspects that were related to biometric registration implementation and Covid-19 expenses,” the company says in its annual report that was posted on the DSE web site last week.
Biometric registration and Covid-19 expenses, along with depreciation (as calculated using the adopted International Financial Reporting Standard 16 (IFRS-16), coupled with continuous investment in network expansion, saw the telecommunication firm’s net profit falling by 49.58 percent to Sh45.47 billion from Sh90.76 billion recorded last year. The biometric registration was in compliance with the new customer registration guidelines by the Tanzania Communication Regulatory Authority (TCRA) which requires that customer SIM Cards are biometrically registered using a National Identification Numbers (NINs).Close
Out of the 2.9 million customers who were barred, 736 000 customers were reconnected, while 2.5 million customers remain non-biometrically registered.
The company also experienced a Sh30.7 billion reduction in profit after tax as a result of the adoption of the IFRS 16 accounting model.
Going forward, said Mr Hendi, the company’s big focus would be to accelerate digital transformation and financial inclusion through mobile money services.
“Enterprise will be a big focus in the year ahead. We aim to bring our Internet of Things (IoT) solutions to life by partnering with different institutions,” the managing director stated.
The Vodacom boss said “the financial impact of complying with the new customer registration guidelines conceals our otherwise sound operational performance”.
As a result of the increased service revenue during the year to March, Vodacom’s equity shareholders received a total of Sh54.5 billion as dividends.
In addition, the company declared a special dividend payout of Sh178.57 a share last month, total ling Sh400 billion to shareholders.
In 2018, the company paid out a total of Sh38.8 billion in dividends to its sharehoolders.
Read the original article on Citizen.