How Much Does Vodacom Spend On Back-Up Power Solutions

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How Much Does Vodacom Spend On Back-Up Power Solutions

Vodacom said today that the ongoing power outages have been disastrous for the South African economy and the industry as a whole.

The telecoms company, which is part of Vodafone (LON: VOD ), said it has spent more than R4 billion on backup power solutions such as batteries and generators since 2020, and another R300 million in the last financial year on additional operating costs in the form of diesel, security and maintenance.

“We remain confident that the ‘virtual wheeling’ pilot project that we’re pioneering with Eskom, South Africa’s power utility company, will be signed off in the near term and that this will have a significantly positive impact on the country’s power grid and ultimately on the over 20 000 towers across the industry that require reliable power supply to operate optimally,” said Shameel Jossub, CEO of Vodacom.

“The power crisis in South Africa, higher interest charges, Ethiopia start-up losses, M&A costs and higher inflation across our markets weighed on net profit growth of 2.1%.”

Vodacom reported a 6.4% decline in headline earnings per share (HEPS) to 948 cents per share for the financial year ended 31 March 31.

HEPS is South Africa’s main earnings measure.

The company attributed the decline to a higher number of shares issued, start-up losses in Ethiopia (40 cents per share) and higher net financing costs (24 cents per share).

Separately, Vodacom declared a final dividend per share (DPS) of 330 cps reflecting our updated and simplified dividend policy of at least 75% of headline earnings. This results in a total DPS of 670 cps.

Vodacom added that it generated operating free cash flow of R25.1 billion, an increase of 10.7%. This included R16.5 billion invested in capital expenditure (excluding spectrum acquisition costs), a further R5 billion used for lease payments and R0.9 billion released from working capital.

Capital expenditure increased by 12.6%, or 4.3% excluding Vodafone Egypt, as the company accelerated investment in network performance.

Excluding Vodafone Egypt, operating free cash flow was broadly flat year-on-year.

Vodacom also invested in securing additional spectrum in Mozambique, South Africa and Tanzania during the year.

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