By Lebone Rodah Mosima
Vodacom Group reported a 25.7% increase in half-year headline earnings on Tuesday, boosted by strong growth across its African operations and the consolidation of Safaricom, despite an ongoing legal battle in Kenya over its controlling stake in the company.
The telecommunications group said headline earnings per share rose to 587 cents for the six months ended 30 September 2026, from 467 cents a year earlier, while revenue increased 25.6% to R102.5 billion.
Vodacom CEO Shameel Joosub said the performance reflected the group’s expansion across Africa and growing contribution from financial services.
“The period also marked a defining milestone in Vodacom’s evolution, with our shareholding in Safaricom increasing to a 55% holding,” Joosub said.
The acquisition remains under legal challenge after Kenya’s High Court ruled in September that the sale of the government’s 15% stake in Safaricom was unconstitutional and invalid.
The court found that the transaction had failed to comply with legal requirements, including meaningful public participation and transparency, and ordered that the shares be restored to the Kenyan government.
Vodacom had increased its effective stake in Safaricom from 35% to 55% after acquiring 15% from the Kenyan government and a further 5% from Vodafone.
The company and other parties appealed the ruling, but Kenya’s Court of Appeal declined to suspend the High Court judgment in October.
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The appellate court nevertheless ordered that the existing position concerning the shares and purchase consideration be maintained while the substantive appeal is expedited.
Vodacom said it remained the registered shareholder through its subsidiary Vodafone Kenya Limited and would continue accounting for Safaricom as a subsidiary from 30 June 2026.
Joosub said the legal challenge had not changed the company’s confidence in the strategic importance of the acquisition.
The deal has significantly increased Safaricom’s contribution to Vodacom’s reported revenue and earnings.
Group earnings before interest, tax, depreciation and amortisation (EBITDA) increased 40% to R42.7 billion, while service revenue rose 29.4% to R85.1 billion.
However, much of the reported increase reflected the consolidation of Safaricom into Vodacom’s financial results.
On a comparable basis, assuming Safaricom had been included in the previous reporting period, service revenue increased 13.3%, while EBITDA grew 18%.
The group also reported a 99% increase in financial services revenue to R15.9 billion, although comparable growth was lower at 19.2%.
Financial services customers increased 15% to 108 million, with the combined Vodacom and Safaricom platforms processing more than $575.5 billion in transaction value over the past 12 months.
The company said growth was particularly strong in Egypt, where local-currency service revenue increased 36.3% and EBITDA rose 31.3%.
Safaricom recorded service revenue growth of 13.1% and EBITDA growth of 27.5%, while Vodacom’s other international operations benefited from stronger performances in Tanzania, the Democratic Republic of Congo and Lesotho.
In South Africa, the company reported a recovery in its prepaid business, supported by increased data consumption and cost reductions.
The South African operation’s EBITDA margin increased to 37.4%, its highest level in several years.
Despite the stronger earnings performance, Vodacom’s free cash flow declined 62% to R1.03 billion from R2.71 billion a year earlier, while its net debt-to-EBITDA ratio increased to 1.6 times from 0.9 times.
Operating free cash flow, a separate measure of cash generated by the business, increased 68.2% to R16.86 billion.
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Vodacom declared an interim dividend of 355 cents per share, an increase of 7.6%, reflecting its revised dividend policy and efforts to balance shareholder returns with debt reduction.
The group invested R13.3 billion during the half-year in expanding network capacity, digital infrastructure and financial services platforms.
Over the past 12 months, it added 3,388 new 4G sites and 4,328 new 5G sites across its operations.
Vodacom also added 26 million customers during the year, taking its total customer base to 250 million, approaching its Vision 2030 target of 275 million.
Joosub said the company’s expanding customer base, financial services operations and investments in digital infrastructure had strengthened its growth prospects.
“We continue to make good progress against our Vision 2030 strategy,” he said.
Vodacom maintained its medium-term growth outlook, supported by its expanded African operations, financial services business and continued investment in network infrastructure.
