Telecom firm reports 19.9pc growth of net profit

By Guardian Reporter , The Guardian
Published at 05:00 AM May 11 2024
Vodacom Tanzania managing director Philip Besiimire
Photo: Courtesy of Vodacom
Vodacom Tanzania managing director Philip Besiimire

The Dar es Salaam Stock Exchange (DSE) listed Vodacom Tanzania, has reported the growth of net profit by 19.9 percent to 53.4bn/- during the year ended in March 2024, from 44.5bn/- recorded during the year ended in March 2023, amid foreign exchange challenges.

Presenting the financial results yesterday, Vodacom Tanzania managing director Philip Besiimire said the achievement resulted from execution of the company strategy, cost saving and improved business environment, which led into strong growth of services revenue.

Services revenue grew by 19.4 percent to 1.26trn/- at the end of March this year, from 1.05trn/- recorded during the previous year, while Earning Before Interest, Depreciation and Amortization (EBTDA) surged by 19.7 percent to 394bn/- from 329bn/-.

According to him, the major growth of revenue is seen as value added services including data and mobile money, which generated a combined revenue of 800bn/- compared to 283.7bn/- generated from the voice segment.

M-Pesa revenue increased by 27.8 percent to 546bn/- from 357bn/- while mobile date revenue amounted to 347.3bn/- at the end of March this year from 273.7bn/- at the end of March 2023.

“We saw the sustained performance during the second half of the year, which resulted into strong full year performance,” he said.

Considering the business growth drivers, strategic execution and the business environment, the company’s boss maintains the upgraded medium term growth targets as ‘High-single digit’ service revenue growth, with scope to exceed in the near term; and 13.0 percent – 16.0percent capital expenditure as a percentage of revenue.

He asserted that the company will continue to delivering social contract, through supporting different segment of the population by increasing digital and financial inclusion, including women, youths and farmers.

Besiimire said during the reported year, the company spent 16bn/- to support agriculture through Mkulima platform as well as disbursing short term financing amounting to 1trn/- to support the growth of small businesses as well as facilitating government payments amounting to 9trn/-.

He explained that the Finscope study that was released during the third quarter of last year revealed massive opportunities for credit market in Tanzania, among businesses and personal investments.

“We will continue tapping on opportunities for business growth focusing on our strategic growth pillars, while also delivering on our purpose and social contract as we continue to connect people and things for a better tomorrow,” he said. 

“We will continue to lead the industry in shaping customer experience and the way people connect and transact inclusively, supported by investment in our digital infrastructure.”

During the year, he said, the company invested 170bn/- to transform ICT infrastructure to increase network capacity, expanding 5G network sites across the country to support business growth and create digital society.

“We will continue investing in our network and IT systems with great emphasis on cyber security, to facilitate a secure expansion of our product portfolio that will attract, satisfy and retain customers,” he said.

On 27 March 2024, the largest telecom company fulfilled all material conditions precedent for acquisition of 100 percent issued share capital of Smile Communications Tanzania Limited at a cost of US$30.5 million (78.3bn/-). 

The purchase consideration included US$4.2 million (10.7bn/-) fee for spectrum reassignment. 

Most of the administrative procedures were completed on 3 April 2024 and the acquisition provides Vodacom Tanzania with access to Smile’s spectrum resources, including 2 x 10MHz of 800MHz and 2 x 10MHz of 2 600MHz.