| |
Statement of financial position |
|
As at 31 March |
|
Movement |
| Rm |
2011 |
|
2010 |
|
10/11 |
| |
|
|
|
|
|
| Property, plant and equipment |
21 577 |
|
21 383 |
|
194 |
| Intangible assets |
5 215 |
|
6 673 |
|
(1 458) |
| Other non-current assets |
1 190 |
|
1 075 |
|
115 |
| Current assets |
13 453 |
|
12 560 |
|
893 |
| Total assets |
41 435 |
|
41 691 |
|
(256) |
|
|
|
|
|
|
| Equity attributable to owners of the parent |
15 622 |
|
13 738 |
|
1 884 |
| Non-controlling interests |
558 |
|
898 |
|
(340) |
| Total equity |
16 180 |
|
14 636 |
|
1 544 |
| Borrowings |
10 063 |
|
13 025 |
|
(2 962) |
| Non-current |
7 280 |
|
9 786 |
|
(2 506) |
| Current |
2 783 |
|
3 239 |
|
(456) |
| Tax liabilities |
782 |
|
1 254 |
|
(472) |
| Other non-current liabilities |
768 |
|
753 |
|
15 |
| Other current liabilities |
13 642 |
|
12 023 |
|
1 619 |
| Total liabilities |
25 255 |
|
27 055 |
|
(1 800) |
| Total equity and liabilities |
41 435 |
|
41 691 |
|
(256) |
|
| |
Non-current assets |
Property, plant and equipment |
| Property, plant and equipment increased to R21 577 million from R21 383 million a year ago. The increase resulted
predominantly from net additions of R5 548 million, offset by depreciation charges of R4 294 million and unfavourable
foreign exchange movements of R738 million. |
| |
Intangible assets |
| At 31 March 2011 our intangible assets were R5 215 million (2010: R6 673 million) with software comprising the largest
element at R2 426 million (2010: R2 271 million) followed by goodwill at R1 970 million (2010: R2 952 million). The decrease
in intangible assets was primarily as a result of an impairment loss of R1 500 million being recognised in the current year,
relating to Gateway. During the year the Group capitalised R915 million net additions, comprising mainly of computer software
and recognised amortisation of R1 061 million in profit and loss. |
| |
|
| |
Capital expenditure |
The Group’s capital expenditure for the year was R6 311 million, 4.9% less than a year ago. Capital expenditure of R1 208 million
(14.7% of revenue) in the International operations was 29.5%(*) lower (reported 41.6% lower) mainly due to a reduction in
capital expenditure in DRC and Tanzania following last year’s significant network investment in Tanzania.
We continued to make substantial investments in the South African network, particularly to enhance quality and support the
48.9% growth in data traffic. South Africa’s capital expenditure of R5 100 million, 9.6% of revenue, was largely allocated to
building a wider and faster data network with 948 new 3G sites bringing the total to 4 290 sites. We enhanced the network with
the latest technologies, by upgrading over a third of our base station sites to the next generation Long-term Evolution (‘LTE’)
ready equipment and more than two thousand dual-carrier sites are now live. The long-distance national fibre build and our own
project to self-provide fibre to our base stations have been slower than planned due to delays in obtaining right of way approvals
and the build freeze during the World Cup. |
| |
Other non-current assets |
| Other non-current assets include financial assets, trade and other receivables, finance lease receivables and deferred tax.
The increase in other non-current assets from R1 075 million at 31 March 2010 to R1 190 million in the current year
is primarily due to a higher deferred tax asset resulting from an increase in unrealised foreign exchange losses relating to
foreign-denominated loans to subsidiaries and the recognition of a deferred tax asset by a new subsidiary in the South African
segment. The increase in other non-current assets is partially offset by a decrease in finance lease receivables relating to
computer equipment and handsets. |
| |
Current assets |
| Current assets consist of financial assets, inventory, trade and other receivables, finance lease receivables, tax receivable and
cash and cash equivalents. At 31 March 2011 current assets increased R893 million to R13 453 million compared to the prior year.
Included in this variance is an increase in trade and other receivables of R749 million mainly relating to revenue growth, an increase
in finance lease receivables of R200 million largely relating to computer equipment, an increase of R120 million in financial assets
due to the recognition of restricted cash for our money transfer services, offset by a reduction in the tax receivable of R77 million. |
| |
Total equity |
| Total equity increased from R14 636 million at 31 March 2010 to R16 180 million at 31 March 2011, as a result of the
R7 979 million net profit for the year being offset by dividends of R5 283 million, an increase in the repurchase of shares of
R962 million and a R559 million unfavourable foreign currency translation movement. Included in the unfavourable foreign
exchange movement is a R350 million loss (2010: R848 million loss), net of tax, relating to foreign-denominated loans to
subsidiaries classified as part of the net investments in these foreign operations. |
| |
Borrowings |
| Total borrowings decreased from R13 025 million at 31 March 2010 to R10 063 million at 31 March 2011. The decrease is
attributed to the partial capital repayment of R1 159 million on a facility raised in the previous year to refinance debt issued
to DRC, R1 000 million repayment of promissory notes to fund capital expenditure and working capital and a reduction
in bank borrowings classified as financing activities of R777 million. |
| |
Tax liabilities |
| Tax liabilities decreased from R1 254 million in the prior year to R782 million at 31 March 2011. Deferred tax liabilities decreased
by R356 million resulting from the impairment of customer bases in Gateway Carrier Services and Vodacom Business Africa as
well as a decrease in the deferred tax liability of Tanzania as the company incurred tax losses in the current year. The decrease in
current tax liabilities of R116 million is primarily as a result of a decrease in the Tanzania capital allowances exposure and as a
result of higher second provisional payments effected on 31 March 2011. |
| |
Other non-current liabilities |
| Other non-current liabilities comprising of trade and other payables and provisions remained in line with the prior year. |
| |
Other current liabilities |
| Other current liabilities increased from R12 023 million at 31 March 2010 to R13 642 million at 31 March 2011 largely due to
an increase in current trade and other payables of R1 291 million and an increase in bank overdrafts of R221 million. Current
trade and other payables increased mainly as a result of higher equipment creditors due to increased stock levels in South Africa
and changes in underlying creditor agreements. |
| |
Liquidity and capital resources |
The major sources of Group liquidity for the 2011 and 2010 financial years were cash generated from operations and
bank-funded debt. The Group’s key sources of liquidity for the foreseeable future are likely to remain the same and will
include committed and uncommitted bank facilities.
Where possible, surplus funds within the South African operations are transferred to the centralised treasury department
through the repayment of borrowings, deposits and dividends. These are then loaned internally or contributed as equity to
fund Group operations, used to repay external debt or to pay external dividends. |
| |
Net debt |
|
As at 31 March |
|
Movement |
| Rm |
2011 |
|
2010 |
|
2009 |
|
10/11 |
|
09/10 |
| |
|
|
|
|
|
|
|
|
|
| Bank and cash balances |
870 |
|
1 061 |
|
1 104 |
|
(191) |
|
(43) |
| Bank overdrafts |
(331) |
|
(110) |
|
(20) |
|
221 |
|
90 |
| Borrowings and derivative financial instruments |
(9 997) |
|
(13 112) |
|
(16 191) |
|
(3 115) |
|
(3 079) |
| Net debt before dividends and STC payable |
(9 458) |
|
(12 161) |
|
(15 107) |
|
(2 703) |
|
(2 946) |
| Dividends and STC payable |
– |
|
– |
|
(2 430) |
|
– |
|
(2 430) |
| Net debt |
(9 458) |
|
(12 161) |
|
(17 537) |
|
(2 703) |
|
(5 376) |
| Net debt/EBITDA (times) |
0.5 |
|
0.6 |
|
1.0 |
|
|
|
|
|
| |
| Net debt decreased to R9 458 million, compared to R12 161 million a year ago. The Group’s financial gearing reduced slightly, with
the net debt to EBITDA ratio at 0.5 times at 31 March 2011 (2010: 0.6 times). 86.7% (2010: 89.6%) of the debt1 is denominated in
rand. R3 114 million (2010: R3 349 million) of the debt1 matures in the next 12 months and 66.2% (2010: 96.3%) of interest
bearing debt (including bank overdrafts) is at floating rates. |
|
| |
Cash flow |
Free cash flow |
|
Year ended 31 March |
|
% change |
| Rm |
2011 |
|
2010 |
|
2009 |
|
10/11 |
|
09/10 |
| |
|
|
|
|
|
|
|
|
|
| Cash generated from operations |
21 385 |
|
19 711 |
|
15 905 |
|
8.5 |
|
23.9 |
| Net additions to property, plant and equipment and intangible assets |
(6 548) |
|
(6 222) |
|
(7 211) |
|
5.2 |
|
(13.7) |
| Operating free cash flow |
14 837 |
|
13 489 |
|
8 694 |
|
10.0 |
|
55.2 |
| Tax paid |
(4 982) |
|
(4 764) |
|
(4 123) |
|
4.6 |
|
15.5 |
| Finance income received |
85 |
|
108 |
|
103 |
|
(21.3) |
|
4.9 |
| Finance costs paid |
(1 111) |
|
(1 621) |
|
(1 498) |
|
(31.5) |
|
8.2 |
| Free cash flow |
8 829 |
|
7 212 |
|
3 176 |
|
22.4 |
|
127.1 |
|
| |
Operating free cash flow increased 10.0% to R14 837 million for the year. The cash generated from operations grew by
R1 674 million and was mainly due to increased EBITDA, coupled with an improvement in working capital. Net cash additions
to property, plant and equipment and intangible assets increased from R6 222 million to R6 548 million. Group free cash flow
increased 22.4% to R8 829 million.
Net cash flows utilised in financing activities increased from R8 548 million to R10 119 million. This resulted from an increase
in debt repayments compared to the prior year, R984 million cash outflow (2010: R385 million) relating to the share repurchase
programme, an increase of R1 375 million in dividends paid and reduced interest payments due to lower interest rates and
average debt. |
| |
 |
