Vodacom full year net profits plunge 32.2 per cent

South Africa’s Vodacom saw 5.6 per cent growth across its consolidated group service revenues during the first quarter of this year reaching ZAR 58.5 billion (US$7.75 billion). However, net profits declined drastically in the 12 months ending March, declining 32.2 per cent to ZAR 4.2 billion, from ZAR 6.192 in the previous year.

During Q1 2010, group traffic increased 11.3 per cent aided by a drop in tariffs across the board, while group subscribers increased 0.7 per cent during the quarter to 40 million.

The South African law requiring registration of SIM cards negatively impacted Vodacom’s local subscriber base, with numbers in its home market declining 4.9 per cent from 27.6 million to 26.3 million.

“Customers in all of our markets have felt the effects of still fragile economic conditions and we have responded by increasing the value delivered to customers, made possible through cost containment measures taken across the Group,” commented Pieter Uys, Vodacom Group CEO.

“We reduced prices in all markets, expanded our data business and delivered strong growth in free cash flow. Our strengthened financial position supports an increase in our dividend payout to shareholders,” Uys added.