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Interesting post. Thanks for the contributions.
Added a few today.
'To be fair, they are doing well in the metropolitan areas, and Mpesa, which is Africa's largest mobile money platform.
Mpesa is apparently used in 10 countries, Kenya, Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa and Ethiopia.'
Migration has historically been a route out of poverty. Africa and India will experience high levels of migration ands some est. 2.8Bn people will migrate from rural to urban in Africa and Asia over the next 30 years.
Vod Mpesa, 3G, 4G positioned to benefit from the growth in the demand for access/ participation in modern (digital) economies. imo
"Most people can't even afford clean water, let alone a mobile phone! So, I see it more like India than Germany. It will be a miracle that VOD will make a fortune there."
To be fair, they are doing well in the metropolitan areas, and Mpesa, which is Africa's largest mobile money platform.
Mpesa is apparently used in 10 countries, Kenya, Tanzania, Mozambique, DRC, Lesotho, Ghana, Egypt, Afghanistan, South Africa and Ethiopia.
The difference between Africa and India, is that African countries are truly independent of each other, whereas India is split up into regions under the same Government. The Indian Government have apparently helped Jio gain dominance through various policy actions, so Vodafone wrote off their investment and all but washed their hands of India, at least that's the impression I get from the various articles I've read.
I've been having "exchanges" with several peoiple in call centers in Egypt. They or what they are being asked to do is horrendous, nothing short of the worst experiance I have had in a any customer experience ever. Your complaint or conversation is put on hold for 2 minutes,10 minutes later you are then put through to someone who doesn't have a clue what you are talking about , you then have to go through all the information and security checks again. it truly is a crime, Vodafone can f**k off. Ofcom can deal with this from now on. No emails allowed to be sent to you and no replys to anyone in customer service.
Are these call centre workers vod employees or through a 3rd party with an appropriate commercial performance contract. Also, we now have Tobi the chatbot!
Does remind me of the lee evans sketch where he is filling in airline travel forms and finally says, 'I only wanted to go on holiday, not work for the ****** company'
According to reports, VOD has outsourced a large numbers of call center roles to India and also has two call centers in Philippines. Has recently brought back more than 2000 call centre roles from South Africa to the UK. Are they going to give back those jobs to Africa again??
The africa model has different economies of scale than Europe. Where europe accounts for a denser network build and debt, africa commercially leverages the partner model, Vod brand ($20Bn value) and less capex intensive imo.
Also, little spoken about is global connectivity and this includes the west africa cable system.
Vod has sold indefeasible rights of use across these systems but has its own use global capacity, a valuable competitive advantage. I cant imagine the global internet without this capacity (google et al)
So there is organic revenue growth at different rates in different countries (Mikey posted a link to a potential rerating of Vod). And then there is the potential sales/ disposal value if Vod think the cable systems are not strategically core. Vod is pregnant with cash/ potential cash imo
Vod call centres soon to be in Lagos, Nairobi & Kinshasa, got to be better than where they are now though, ha!
Yes fleccy, indeed Africa are third world countries. Most people can't even afford clean water, let alone a mobile phone! So, I see it more like India than Germany. It will be a miracle that VOD will make a fortune there. The only good thing is, they don't have to pay their workers there high wages......lol
"Africa (vodacom) could be vods saviour, or could be it's downfall,who knows? It's a gamble. We just have to wait & see."
Africa is a third world continent, most of Vodafone's profits come from elsewhere. Germany is where the bulk of Vodafone investment has gone, and more recently some of the Eastern Block EU states. Currently, germany comprises 31% of Vodafone service revenue's, with Germany's total revenue coming in at €12.984 Billion; The UK comes in at €6.151 Billion total revenue; Vodacom comes in at €5.181, but granted it does have potential for high profit growth, assuming it can expand its operations throughout the continent. I wouldn't describe Africa as make or break for VOD though.
Yes Dan, VOD kept putting food in its mouth when it's already full. They bought too many loss making operations over the years and got themselves deeper and deeper in debts. After India now Africa, let's hope that it won't be another money pit for VOD......LOL
Hello s_i_d_i At end of the day vod needs to make enough net profit to pay interest % on debt, divi payments & some left to pay back some debt. All these other complex figures are confusing & conflicting & many will just pick the figures that best suite there argument. We all know vod has a big challenge to make enough profit to keep it's deb't under control. Can vod turn this around, we all hope so, but its all down to how much profit vod makes. Too many armchair accountants on here for my liking! Africa (vodacom) could be vods saviour, or could be it's downfall,who knows? It's a gamble. We just have to wait & see.
'a bit of improvement but will it be good enough to make enough profit to cover the dividends?'
At Q1 Vod confirmed full year guidance so, keeping it simple, i am looking for the same in Q2, 16 Nov and confirmation of the interim dividend.
Well Android, that sounds like a bit of improvement but will it be good enough to make enough profit to cover the dividends? If not then same old story. They will need to borrow more. So, let's wait and see what the next results will be then. Good luck to all the faithful LTHs. Hope that VOD can truly turnaround and recover. So that every shareholder will be able to get out unharmed.
'i just hope we get better results here next month'
Me too. Q1 was good. Verizon moving forward with good performance and possibly a bell weather for wider economic uplift.
I am also trying to teach myself TA. The weekly candle has the look of a spinning top or imperfect high wave candle. 'Often the 1st sign of a reversal and a change in momentum.' RSI also hard to call if it wants to go 30 or its gone far enough?
AIMO and still learning so happy to take any insights
'Has VOD improved financially or has it gone poorer?'
Depends if you believe the management. Is the difference a recurring cost, if so, what is it? If it is not recurring then its not a sustainability issue. For example, reduction in capex, no more spend in India. What are the big capex spends that are continuing. Network costs are lower etc
Some people here have been ramping this share up for years, possibly because they have over invested here and don't want to accept what a bad investment this has been, the realty is the only way this has been going is backwards, i just hope we get better results here next month, so i can i can reduce my losses here, as it's not even worth selling at the moment, so best of luck to everyone
Yes Android, I got them all but just the last two items of your post:
Opening net debt (42,047)
Closing net debt (40,543)
Then the last two items of my post:
Opening cash in hand and at bank €12.284b
Closing cash in hand and at bank: €5.821b
Net debt decreased by €1.504b
Cash in hand and at bank decreased by €6.463b
Now, what do you see? Has VOD improved financially or has it gone poorer?
No offence taken. Here is the detail. See Q1 spreadsheet on the link.
Have a look at cashflow, debt reduction etc. I would ignore historic non recurring costs. I use cash as proxy for current and potential future cashflows, not historic cost accounting. Vantage towers network economic cost is not the same as the historic of building towers as the cost is shared. Spain retail shops not required etc
Free cash flow (pre spectrum, restructuring and integration costs) €15.019 Bn
Licence and spectrum payments (1,221)
Restructuring and integration payments (421)
Integration capital expenditure (267)
Free cash flow 3,110
Acquisitions and disposals 447
Equity dividends paid (2,427)
Share buybacks (53)
Foreign exchange (loss)/gain (219)
Other movements on net debt 646
Net debt decrease/(increase) 1,504
Opening net debt (42,047)
Closing net debt (40,543)
Lol Android, no offense but I think you were only looking at one side of a coin. All you talking about were income (turn over) of a business. Do you realize that you need to pay for the expenses? Let's take a look at a very simple example: say when you have opened a shop. Your first week turn over was £10k. Then you need to pay for your stock, staff wages, gas, electricity, water, rent, business rate, VAT return and many other expenses. After all these were paid you probably have got only £500 left or maybe minus(made a loss).
So called cash flow is the money you took from the business operations before paying the costs (like the £10k of the example above). VOD 's turn over(revenue) in 2021 was €43.809b. pre-tax profit was €4.4b. Post tax profit(net profit) was €536m. Of which, ¥412m went the minority shareholders and only €112m went to the shareholders, that's EPS 0.324p per share (PE 341). And VOD paid 7.761p dividend per share!
The net profit could over cover less than 5% of the payout. Where did they find the money to pay us then. From the reserve of course and needless to say, those reserve were from borrowings!!
There is another fact you have missed: VOD's retain earnings (left over after all expenses were paid at the end of the financial year since the beginning of the company) that's -€121.587b!
Good lord, VOD has made a total loss of more than €121b since the company has started trading. How did they survive then? Borrowings of course and that's how they ended up with a mountain of debts!!!!!
There's one more thing: VOD'S cash in hand and at bank was €13.284b in 2020. Dropped to €5.821b in 2021. What do you think it will be in 2022 then. Do you think VOD can carry on trading without more borrowings? I am not so sure. I am sorry to pour cold water on you guys..... hahahaha
Vod is producing Free cash flow (pre spectrum, restructuring and integration costs) c.€15Bn pa.
imo is sufficient to pay down debt as required, recently rolled debt fixed at 1.5% out for 60 years (and interest rates might rise), pay 7% div, pay interest est. €1.55Bn net, paying taxes, investing capex, creating vantage asset, m-pesa product growth, 78m marketable homes passed in Europe, organic service revenue growth, 300m diverse mobile subscribers, 25 fixed broadband customers, 20m TV and fixed line voice customers, 7m converged customers in consumer, 3.2m terrabytes data usage.
Lots of facts and no exaggeration!