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Vodacom grows users, revenue, earnings

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Vodacom grew its customer base substantially during the year ended 30 March 2012, also showing growth in revenue and earnings.

The group grew service revenue by 7,8%, while EBIDTA was up 10,5%, operating free cash flow up 14,1% to R16 934-million, headline earnings per share (HEPS) up 8,1% to 709 cents and a 54,3% increase in total dividend per share to 710 cents.

During the year, Vodacom increased its customers by 29,9%, adding 11-million new customers, while there was a 48,6% increase in active data customers to 15,1-million.

The group invested significantly in its network during the year, with group capex increasing 37,7% to R8,662-million. It also increased the number of base stations by 22% while radio equipment renewals underway in all operations.

Vodacom says demand for data services remains high in South Africa.

Active data customers increased 35,4% to 12,2-million and there was a 55,4% increase in active smartphones on the network to 5,1-million. Data revenue for the year grew 23,6% to R7 639-million.

International growth momentum continues, with service revenue up 27,5%, EBITDA up 73,9% and active M-Pesa customers up 1,8-million to 3,1-million in Tanzania. International operations are now making a positive contribution to free cash flow.

Pieter Uys, Vodacom group CEO, comments: “Our first year of trading as the new red Vodacom has been a big success. Our customer base has expanded 30% to 48 million, we’ve invested R8,7-billion in our networks and we’ve achieved the number one net promoter score in South Africa and in two out of our three measured International markets. From a financial perspective, thanks to building the top line and also managing costs, EBITDA is up 11% and HEPS is up 8%.

“Perhaps more importantly, we’ve seen strong delivery in the areas driving growth into the future – data and the International businesses. Combined, these accounted for 87% of the growth in group service revenue. We added 5-million active data customers, taking the total to 15-million and supporting data revenue growth of 27%. The International customer base has now reached 19-million, an increase of 36%, and this segment has passed the important milestone of generating positive free cash flow.

“Overall, the team delivered a very solid performance and the platforms for growth are well established. The 24% growth in Group free cash flow supported a higher dividend of 710 cents and helped us deliver a 45% total shareholder return.”