|Six months ended 30 September||Year-on-year % change|
|Revenue||41 995||40 151||4.6||6.9|
|Service revenue||34 654||33 968||2.0||4.6|
|EBITDA||15 731||15 278||3.0||3.1|
|EBIT||10 830||10 847||(0.2)||(1.4)|
|Net profit from associate and joint ventureD||349||–||–|
|Operating profit||10 964||10 717||2.3||(2.2)|
|Net profit||6 712||6 275||7.0|
|Capital expenditure||5 378||5 714||(5.9)|
|Operating free cash flow||6 311||7 655||(17.6)|
|Free cash flow||2 028||3 541||(42.7)|
|Headline earnings per share (cents)||445||440||1.1|
|Interim dividend per share declared (cents)||390||395||(1.3)|
Shameel Joosub, Vodacom Group CEO commented:
We concluded two key milestones during the first half of the year: Successfully acquiring a 34.94% strategic stake in Safaricom and completing the listing of a 25% stake in Vodacom Tanzania. The listing, the largest IPO on the Dar es Salaam Stock Exchange since it launched 19 years ago, resulted in almost 40 000 Tanzanians investing directly in capital markets for the first time.
In addition we delivered another good financial performance for the first six months of the financial year, despite weaker economic conditions in some of our key markets, the Group increased normalised service revenue by 4.6%*, boosted by a strong increase in customer gains in South Africa and significant gains in data and M-Pesa revenue internationally.
In South Africa, we gained 2.9 million customers to breach the 40 million mark for the first time. We now also have 3.3 million sim card connections in our Internet of Things offerings. This growth in both areas shows that our segmented markets approach and the delivery of greater value through innovative personalised bundles is continuing to produce results. An increase in smartphone device sales contributed to the 7.7% increase in revenue growth.
We have consistently said throughout the year that we would accelerate the reduction in data prices and address out-of-bundle prices. These are promises that we have delivered on, with effective data prices decreased by 24.2% during the six-month period. On 1 October 2017 we further reduced out-of-bundle prices by up to 50%.
We have managed to do this while continuing to invest significantly in infrastructure at a time when the lack of available spectrum is pushing our costs higher. Without new spectrum we are forced to build more base stations to meet data growth demand. Additional spectrum will allow us to invest more efficiently and accelerate our rural coverage programme. Over the six month period, we invested R3.9 billion to maintain our network lead and enhance our IT systems.
Stripping out exchange rate volatility, our International operations continue to gain momentum as evidenced by the 5.5% growth in normalised service revenue and the 1.4 million increase in customers to 31.1 million. Our investment in a new M-Pesa platform has had an immediate impact resulting in a 70.9% increase in transactions and an average of R24 billion processed through the enhanced system on a monthly basis. We expect that the Safaricom transaction will further drive M-Pesa development and penetration outside of South Africa. Efforts to drive down the cost of smart devices coupled with increased data speeds and wider coverage contributed to normalised data revenue growth of 6.6%* in our International markets.Looking ahead, our strategy to become a leading digital company and empower a connected society remains a key focus. We anticipate that our investments in big data and sophisticated machine learning will increasingly allow us to provide customers with relevant Just 4 You propositions. In turn, this should continue to drive revenue and customer growth across all markets.