Last checked at 
* FY headline earnings per share up 3.7%
* Operating profit growth upgraded to mid-to-high single
digit
* Alipay super app launching in Q2 in South Africa
(Adds financial services comments)
By Nqobile Dludla
JOHANNESBURG, May 18 (Reuters) - Vodacom Group Ltd
has upgraded its medium-term operating profit growth target to
mid-to-high-single digits on the back of improved growth
prospects for its international business and Kenya's Safaricom
.
South Africa's second-biggest telecoms operator said on
Tuesday it had upgraded the target from the mid-single digit
range after reporting a 3.7% jump in full-year earnings.
Safaricom, which has the M-Pesa payments business, is part
owned by Vodacom and Britain's Vodafone
Operating profit growth for Vodacom's international
business, which includes M-Pesa, slipped 16.3% in the year ended
March. But it is seen tracking ahead of the medium-term group
target in the 2022 financial year, Vodacom's Chief Financial
Officer Raisibe Morathi told analysts.
M-Pesa, which allows customers to send money, save, borrow
and make payments, is expected to support the recovery, she
said.
M-Pesa now processes $24.5 billion a month in transaction
value across Vodacom's international markets, including
Safaricom, up 63.5%, Vodacom said.
Vodacom's financial services business, like its peers,
experienced a jump in transaction values and customer numbers
during the pandemic, as movement restrictions and avoidance of
physical cash pushed people towards mobile money platforms.
Vodacom sees future growth from this business, along with
other new services such as digital, fibre and the internet of
things.
Morathi said the group revenue contribution of these "beyond
mobile" services, was seen increasing from about 17% in the 2021
financial year to between 25% to 30% in FY 2024 and above 30% in
FY 2026.
In South Africa, Vodacom is launching a "super app" with
digital payment provider Alipay, part of China's Alibaba group
. Branded as VodaPay, it will allow consumers to shop
online, pay bills and send money to relatives.
"We see this super-app as a precursor to M-Pesa's evolution,
supporting accelerated growth across our financial services'
businesses," Chief Executive Shameel Joosub said.
A soft launch is planned for the second quarter and a full
launch in the third quarter, Joosub told analysts.
Asked whether Vodacom would spin-off M-Pesa, Joosub said:
"We're not in the position yet where we think the time is
optimal to sell or even monetise a portion of the asset, because
we believe there is still a lot of growth left in M-Pesa."
"We would of course prefer it that the market recognises the
value of these financial service assets, if not then we will
consider," he said.
Rival MTN Group is considering spinning out its
fibre and financial services businesses and could potentially
list one of them to unlock value it said was trapped in its core
business, it said March.
($1 = 14.0553 rand)
(Reporting by Nqobile Dludla; Editing by Jacqueline Wong,
Rashmi Aich and Jane Merriman)
