Vodacom Group Limited

Vodacom reported revenue of ZAR 81.6 billion, up 10.9%. Customers reached 223 million, up 8.6%, and financial services customers rose to 94 million, up 13.1%. Group net profit to equity holders was ZAR 9.1 billion, and headline earnings per share was ZAR 4.67, up 32.3%. Return on capital employed increased 3.8 percentage points to 26.3%, and the interim dividend was ZAR 3.30 per share, up 15.8%. At the segment level, Egypt contributed ZAR 7.8 billion to operating profit, up 66.5% on a rand basis; Safaricom contributed ZAR 2.1 billion, up 65.3%; and South Africa remained the largest component of operating profit at ZAR 8.8 billion. Management said group EBITDA growth was ahead of its double-digit target. For the second half of FY2026, it expects improved performance from South Africa, strong EBITDA growth from Egypt and the international business, and a step-up in capital expenditure after spending ZAR 9.4 billion in the first six months. Full-year capex is planned at ZAR 23 billion.

Mohamed Shameel Joosub framed the half as a key proof point for the Core Vision 2030 strategy, saying the business is seeing the benefits of geographic and product diversification. He highlighted strong progress in financial services, fiber and IoT, and said the company is well on track for its medium-term targets. His tone was upbeat but measured, especially on South Africa, where he acknowledged prepaid pressure and said the company would balance price discipline with competitiveness.

Raisibe Morathi said the confidential Please Call Me settlement was included in the results, and she would not provide a normalized EBITDA figure excluding it. She pointed to South Africa EBITDA of minus 5.3% in the half, but said margins should normalize in the second half toward 36% to 37% as the settlement laps and cost efficiencies continue. She also said the international business margin around 34% is sustainable, and that Egypt’s 47% margin is probably above a sustainable medium-term level, with mid-40s more realistic. On capital allocation, she said the Maziv investment should earn above Vodacom’s roughly 15% cost of capital in the medium term, and confirmed the settlement was fully reflected in EPS and was not adjusted out for dividend purposes.

Analysts focused heavily on South African prepaid, asking about consumer pressure, gambling-related wallet weakness, competition, and whether price floors could be adopted. Management said the base was not shrinking, ARPU was broadly stable at ZAR 58 in Q1 and ZAR 57 in Q2, and the weakness was more in voice than data because rivals were stuffing more voice into offers. Questions also covered the fiber strategy, where management said township and rural coverage is part of the Maziv footprint, and the Egypt financial-services opportunity, which management said still has room to expand into payments, merchants, lending, insurance, international money transfer and virtual cards. On M&A and Safaricom, management said it is focused on closing Maziv and would consider selective JVs and in-market consolidation, but there is no discussion of breaking up Safaricom.