Vodacom Profit Rises 25.7% on Safaricom Deal

SOUTH AFRICA · COMPANIES

Vodacom, the South African mobile group that now serves 250 million customers across Africa, said on Tuesday 10 November 2026 that its headline earnings per share (HEPS) rose 25.7% in the half-year to 30 September. The figure, which excludes one-off gains, reached 587 cents (about US$0.36), against 467 cents (about US$0.28) a year earlier.

It is the first period in which Vodacom counts Safaricom, the Kenyan operator behind the M-Pesa mobile-money service, as a subsidiary, after lifting its effective stake, meaning its share of ownership, from 35% to 55% on 30 June 2026. The High Court of Kenya has since voided the sale of the Kenyan government’s 15% stake to Vodacom’s Kenyan subsidiary, and appeals by Vodacom, the Kenyan government and Vodafone Group, the British telecoms company, are pending.

For US readers, the report shows African mobile money at scale: Vodacom says customers used its platforms, including Safaricom, to access and initiate more than US$575.5 billion in transaction value over the last twelve months. Vodacom’s American depositary receipts (ADRs), dollar-priced certificates that represent its shares, carry the code VDMCY.

What Vodacom Reported

Revenue rose 25.6% to R102.5 billion (about US$6.25 billion) from R81.6 billion (about US$4.98 billion), helped by the consolidation of Safaricom, meaning the inclusion of its results in Vodacom’s accounts, from the second quarter. All rand conversions in this article use the 10 November 2026 market rate of R16.39 per US dollar.

Service revenue, the income from services such as calls, data and mobile money, grew 29.4% to R85.1 billion (about US$5.2 billion). On a pro-forma basis, which assumes Safaricom was part of the group for all of last year, growth was 13.3%.

EBITDA, a measure of operating profit before interest, tax, depreciation and amortisation, grew 40.0% to R42.7 billion (about US$2.6 billion). Pro-forma growth was 18.0%, which Vodacom said was ahead of its guidance range.

Vodacom served 250 million customers, up 11.8%, including 108 million financial services customers. It added 26 million customers over the last twelve months and aims for 275 million by 2030.

Why Headline Profit Is the Number to Watch

Operating profit jumped 156.9% to R52.0 billion (about US$3.2 billion), and net profit attributable to shareholders rose to R34.4 billion (about US$2.1 billion) from R9.1 billion (about US$0.56 billion). Both are inflated by a one-off accounting gain of R23.1 billion (about US$1.4 billion) that arose when Safaricom changed from an associate, a company in which Vodacom held a minority stake, to a subsidiary it controls.

Vodacom itself calls headline earnings, which strip out one-off items, the better guide to underlying performance, and they rose 25.6% to R11.3 billion (about US$0.69 billion). Earnings per share including the gain reached 1,779 cents (about US$1.09), against 472 cents (about US$0.29).

Safaricom: Control Under Legal Doubt

Vodacom’s Kenyan subsidiary, Vodafone Kenya, which holds the Safaricom stake, paid R25.8 billion (about US$1.6 billion) in cash for 15% of Safaricom from the Government of Kenya. Together with the remaining 12.5% of Vodafone Kenya, bought from a Vodafone Group unit, this lifted Vodacom’s effective stake from 35% to 55%.

The High Court of Kenya nullified the 15% sale on 15 September 2026. On 13 October the Court of Appeal in Nairobi ordered the status quo, meaning the existing position, kept while it hears an expedited appeal.

According to Vodacom’s results, Vodafone Kenya, which Vodacom now wholly owns, remains the registered holder of the shares, and the purchase money is preserved until the appeal is heard. The group expects an appeal date to be set before the end of December 2026.

Chief executive Shameel Joosub said: “Our confidence in the strategic rationale of the transaction remains unchanged.” Vodacom’s accounts call the outcome of the appeal uncertain and say the accounting would be reassessed if it fails.

Net debt, meaning borrowings minus cash, rose by R78.8 billion (about US$4.8 billion) to R135.6 billion (about US$8.3 billion), mainly because of the Safaricom deal. The ratio of net debt to EBITDA rose to 1.6 times from 0.9 times.

Where the Growth Came From

Vodacom reported particularly strong growth in Kenya, Egypt, Tanzania, the Democratic Republic of Congo and Lesotho, helped by a recovery in South African prepaid mobile, meaning pay-as-you-go customers. In South Africa the EBITDA margin, meaning EBITDA as a share of revenue, widened to 37.4%, which Vodacom called the highest in several years.

Egypt grew service revenue 36.3% and EBITDA 31.3% in local currency. Safaricom grew service revenue 13.1% and EBITDA 27.5% in Kenyan shillings, as its Ethiopian business nears break-even at EBITDA level.

Financial services revenue, from mobile money and related services, almost doubled, up 99.0% to R15.9 billion (about US$0.97 billion). On a pro-forma basis it rose 19.2%, and financial services customers grew 15.0%.

Cash and the Dividend

Free cash flow, the cash left after interest, tax, and net dividends received from associates and paid to minority shareholders, fell 62.0% to R1.0 billion (about US$63 million). Operating free cash flow, before those items, rose 68.2% to R16.9 billion (about US$1.03 billion).

Vodacom blames a timing mismatch: it paid Safaricom’s final dividend to outside shareholders, but consolidated Safaricom’s cash flow only from the second quarter. It says working-capital timing should unwind in the second half, which it expects to improve free cash flow.

The board declared an interim dividend of 355 cents (about US$0.22) a share, up 7.6%, payable on Monday 7 December 2026 to shareholders on the register on Friday 4 December. The last day to buy shares with the dividend is Tuesday 1 December, and shareholders who are not exempt from dividend tax pay 20% withholding tax, a tax deducted at source, leaving 284 cents (about US$0.17).

What It Means for You

Holders of Vodacom’s depositary receipts own a rand-earning company, so the dollar value of the dividend and the share price moves with the exchange rate as well as with results. At R16.39 per dollar, the 355-cent dividend is worth about US$0.22.

The next fixed dates are 1 December, the last day to buy for the dividend, and the appeal date Vodacom expects before the end of December. Judging the Safaricom deal means watching the Nairobi court more than the headline profit.

What Is Not Known

The date and the result of the Nairobi appeal are not known. Vodacom’s own accounts call the outcome uncertain.

Frequently Asked Questions

How much did Vodacom’s profit grow?

Headline earnings per share rose 25.7% to 587 cents (about US$0.36) in the six months to 30 September 2026. Net profit was higher still because of a one-off Safaricom accounting gain.

When is the Vodacom dividend paid?

The interim dividend of 355 cents (about US$0.22) is payable on Monday 7 December 2026 to shareholders registered on Friday 4 December. The last day to buy with the dividend is Tuesday 1 December.

Does Vodacom still control Safaricom?

Vodacom consolidates Safaricom and holds 55% effectively, but the Kenyan High Court voided the 15% purchase on 15 September 2026. Appeals are pending, and according to Vodacom the Court of Appeal ordered the status quo kept on 13 October.

How many customers does Vodacom have?

Vodacom serves 250 million customers, up 11.8%, including 108 million financial services customers. Its target is 275 million by 2030.

Sources: Vodacom Group, interim results media release, 10 November 2026; Vodacom Group, reviewed interim results booklet, 10 November 2026; Vodacom Group, exchange notice on the interim dividend, 10 November 2026.

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