Vodacom Reports Double-Digit Earnings Growth Fueled by Egypt, Kenya, and South Africa

Vodacom has reported one of its strongest six-month performances to date, with earnings per share (HEPS) increasing by 25.7% to 587c for the six months to end-September. The company's reported earnings before interest, tax, depreciation, and amortisation (ebitda) rose 40% to R42.66bn, while attributable profit surged to R34.3bn from R9.1bn a year ago.

The strong performance was driven by excellent growth from all markets, particularly Kenya, Egypt, Tanzania, the Democratic Republic of the Congo (DRC), and Lesotho. CEO Shameel Joosub attributed the growth to a recovery in the prepaid market in South Africa and the consolidation of Safaricom from the second quarter. Group revenue increased by 25.6% to R102.5bn, reflecting the Safaricom acquisition.

On a pro-forma basis, which includes Safaricom in the comparative period, service revenue growth of 13.3% trended above Vodacom's medium-term target, reflecting strong commercial momentum across its portfolio. Service revenue grew 29.4% to R85.1bn in rand terms and increased 13.3% on an adjusted basis. Group customer numbers were up 11.8% to 250-million, with 108-million financial services customers.

Financial services remain one of the most compelling elements of Vodacom's investment case and one of its most important growth drivers. The combination of Vodacom and Safaricom creates one of Africa's largest fintech platforms, with pro-forma financial services revenue of R43.1bn over the last 12 months. Customers used the group's financial services platforms to access and initiate more than $575.5bn in transaction value over the same period.

Egypt was a star performer for the group, delivering local-currency service revenue growth of 36.3% and ebitda growth of 31.3%. Safaricom, which was acquired by Vodacom, delivered service revenue growth of 13.1% and ebitda growth of 27.5%. Ethiopia is nearing ebitda break-even, according to Joosub.

The High Court in Kenya recently declared the R36bn Safaricom acquisition null and void, but an expedited appeal is under way. The Court of Appeal in Nairobi has ordered that the status quo be maintained, and Vodacom remains the registered shareholder of the shares pending the outcome of the appeal.

Vodacom's second half of the financial year will focus on execution, accelerating operational leverage, and realising the full value of its portfolio. The company is on track to deliver its medium-term guidance and progress its Vision 2030 ambitions, backed by strong market positions, scaled fintech platforms, disciplined capital allocation, and growing diversification.

Key points

• Vodacom's earnings per share increased by 25.7% to 587c for the six months to end-September.
• The company's service revenue grew 29.4% to R85.1bn in rand terms and increased 13.3% on an adjusted basis.
• Egypt delivered local-currency service revenue growth of 36.3% and ebitda growth of 31.3%.