Vodacom Group Limited ( OTCPK:VODAF ) Q2 2020 Earnings Conference Call July 23, 2020 10:00 AM ET
Company Participants
Shameel Joosub – CEO
Sitho Mdlalose – Interim CFO
Conference Call Participants
Preshendran Odayar – Nedbank CIB
Jonathan Kennedy-Good – Standard Bank
Vyacheslav Degtyarev – Goldman Sachs
Dilya Ibragimova – Citi
Sunil Rajgopal – HSBC
Shameel Joosub Thank you. Good afternoon, everyone and good morning to those joining the call in the U.S. I’m joined by Sitho Mdlalose, our Interim CFO and Shaun Biljon, our Head of Investor Relations. During quarterly results, we will only focus on revenue and key performance indicators today.As with prior quarterly results, Safaricom does not report earnings performance so we will therefore not be disclosing an update on their results during this call. Our results for this quarter were impacted by the COVID-19 pandemic both positively and negatively. The South African business was resilient and delivered strong growth in service revenue, despite the price reductions introduced on 1 st of April.Our international operations are however impacted by the lower economic activity, free or discounted peer to peer transfers in M-Pesa and customer registration requirements in Tanzania. Having a diversified portfolio resulted in the group benefiting from currency changes, pushing revenue up by 5.6% and service revenue up by 7.6%. Normalized growth was 1.3% for revenue and 2.6% for service revenue.Let’s take a look at the South African segment. Service revenue increased 6,4% driven by strong customer revenue growth of 4,3%. This was supported by the good uptick in data demand with this increase usage offsetting the impact from a price reduction on our 30-day bundles from 1 st of April.The demand for data increase in the quarter as people worked, entertained and studied from home during the various phases of the lockdown period. Data traffic doubled in the quarter and usage per smart device grew 75% year-on-year and 22% from the March 2020 quarter to 2.2 gigabytes per user. There are now 13,2 million 4G devices connected onto our network, an increase of almost 30% year-on-year. The overall trends in the contract customer segment improved with revenue growing at 3,4% and customers up 2.9% to 6.1 million customers. We offered a number of data products to support businesses to work from home and to assist schools and universities to continue education initiatives.Performance in the prepaid segment also improved with customer revenue growth of 5%, a significant growth in ARPU of […]