Vodacom Group, the parent company of Safaricom, recorded its strongest earnings expansion in recent years after headline earnings per share climbed 22.9% for the financial year ending 31 March 2026.
The telecom giant said growth from Egypt and its wider international operations compensated for weaker momentum in South Africa, even as a Kenyan court battle continues to delay a transformative Safaricom acquisition deal.
Group service revenue rose 10.6% to R133.6 billion, or 12.9% on a normalised basis, keeping Vodacom within its long-term double-digit growth ambitions.
However, the company’s planned acquisition of an additional 20% stake in Safaricom remains frozen under a status quo order issued by the High Court of Kenya. The deal, valued at US$2.1 billion, would significantly reshape Vodacom’s earnings structure.
CEO Shameel Joosub told CNBC Africa the results demonstrated the resilience of Vodacom’s diversified African footprint, noting that the Group had comfortably exceeded its financial guidance.
EBITDA increased 12.8% to R62.6 billion, while free cash flow rose 20.1% to R21.8 billion. The Board also approved a full-year dividend of 735 cents per share, representing an 18.5% increase and beating analyst expectations.
Egypt Takes Centre Stage
Egypt has now become Vodacom’s single largest profit contributor, accounting for 29.7% of Group EBITDA, up from 24.2% a year earlier.
Vodafone Egypt delivered a 36.2% rise in service revenue in local currency terms, while EBITDA jumped 44.5%, supported by a strong 45% operating margin.
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Its mobile money platform, Vodafone Cash, recorded revenue growth of 48.2% in local currency, with customer numbers expanding 28.5% to 14.7 million users.
Although fourth-quarter growth moderated following the anniversary of post-devaluation price adjustments, management maintained that underlying demand remained robust.
Vodacom’s International segment, which includes operations in Tanzania, the DRC, Mozambique and Lesotho, also posted strong results. EBITDA margins improved from 29.3% to 34.6%, with EBITDA rising 27.8% to R12.1 billion.
Tanzania led the charge, delivering 38.8% local currency EBITDA growth despite absorbing a R742 million depreciation expense linked to a radio network replacement programme.
M-Pesa revenue from international markets increased 22.8% on a normalised basis to R9.9 billion. Higher-value products such as lending, savings and merchant services now contribute nearly half of M-Pesa revenue.
South Africa Still Under Pressure
South Africa generated R64.4 billion in service revenue, reflecting modest growth of 2.1%.
EBITDA from the domestic business slipped 1.7% to R33 billion, weighed down by a once-off settlement linked to the long-running Kenneth Makate “Please Call Me” legal dispute, which was resolved out of court in November 2025.
Excluding that settlement, second-half EBITDA growth stood at 1.8%.
Vodacom also reported improving momentum in the final quarter after contract price adjustments implemented in February 2026 supported revenue growth. Meanwhile, prepaid customer revenue continued to decline, though at a slower pace.
Safaricom Acquisition Remains in Limbo
Safaricom, where Vodacom currently holds an effective 34.94% stake, contributed R4.6 billion to Group operating profit, representing a 38.3% increase.
On a full basis, Safaricom generated KSh 414.1 billion in service revenue and KSh 220.3 billion in EBITDA, with Kenya operations delivering a margin of 56.7%.
Safaricom’s financial services business alone generated revenue of R24.5 billion, significantly larger than Vodacom’s consolidated financial services line of R16.8 billion.
In December 2025, Vodacom reached an agreement with the Government of Kenya to purchase an additional effective 20% stake in Safaricom for US$2.1 billion, which would lift its ownership to about 54.93%.
If approved, the transaction would lead to full consolidation of Safaricom under IFRS accounting rules and add approximately R55.5 billion in service revenue alongside R29.4 billion in EBITDA to Vodacom’s reported figures.
The transaction would also trigger a revaluation of Vodacom’s existing Safaricom stake, potentially producing a substantial once-off accounting gain.
A virtual court hearing concerning the conservatory order, initially postponed from 27 April 2026, is scheduled for 18 May 2026.
Vodacom has not publicly identified the party challenging the transaction or disclosed the legal arguments behind the case. The Group stated that the acquisition can only proceed once the court order is lifted.
