Vodacom: Summary of Interim Results For The Period Ended 30 September 2025

Research Notes November 2025 > https://www.unum.capital/post/rnov2025

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5 Points To Note

1. Explosive Earnings Growth: Vodacom has delivered a stellar set of results, with Headline Earnings Per Share (HEPS) surging 32.3% to 467cps. This massively outperforms top-line revenue growth, indicating exceptional operational leverage and successful scaling in high-growth markets.

   
   

2. Major Legal Risk Removed: A critical highlight is the out-of-court settlement of the "Please Call Me" matter. The removal of this decade-long contingent liability provides definitive market certainty and should trigger a significant positive re-rating of the share price.

   
   

3. Egypt & Fintech Firing: The diversification strategy is paying off handsomely. Egypt service revenue skyrocketed 42.3% (in local currency), while Financial Services revenue grew 20.3% to R8.0bn, cementing these as the Group's new primary growth engines.

   
   

4. Safaricom/Ethiopia Scaling: The associate investment in Safaricom is delivering, with net income up 52.1%. Crucially, the greenfield Ethiopia operation is reaching critical mass (11.1m customers, up 83.7%) with "moderating losses," signaling it is approaching break-even.

   
   

5. Robust Shareholder Returns: despite heavy capital investment (R9.4bn capex) and macro headwinds, the Board declared a 330cps interim dividend, up 15.8%. This signals high management confidence in the Group's sustained cash generation capabilities.

   
   

Core Thesis Vodacom has successfully executed its diversification strategy. It is no longer solely reliant on the low-growth South African market. The integration of Vodafone Egypt and the scaling of Safaricom Ethiopia have provided new layers of double-digit growth. Combined with the resolution of major legal uncertainties ("Please Call Me") and pending infrastructure deals (Maziv, various TowerCos), the business is fundamentally de-risked while simultaneously accelerating growth.

Comprehensive Summary The Group delivered ahead of its medium-term targets, with normalized service revenue growing 13.6% and EBITDA up 14.8%. The business is demonstrating resilience against currency volatility and macro pressure. The strategic focus on "systems of advantage" (Fintech, Digital Services, IoT) is working, now contributing nearly 22% of Group service revenue, moving steadily towards the 30% Vision 2030 target.

Segment Performance Analysis South Africa (Mature/Cash Cow): "Stable" performance with 2.2% service revenue growth. The focus here is on network resilience (R54.1bn invested over 5 years) and managing the transition to data/fintech to offset voice pressure.

Egypt (High Growth Star): Exceptional performance with 42.3% local currency growth. The launch of 5G in this market is expected to sustain this momentum.

International (scaling): DRC, Lesotho, Mozambique, and Tanzania are all accelerating, delivering 13.3% normalized service revenue growth.

Financial Services (Strategic Pillar): Now a substantial business in its own right (R8.0bn revenue in 6 months). With 93.7 million customers, this ecosystem provides a massive competitive moat.

Strategic Catalysts & Risks

1. Catalyst (Immediate): "Please Call Me" settlement removes a major overhang on the stock.

2. Catalyst (Near-Term): Final approval of the 30% stake in Maziv (fibre infrastructure) will accelerate SA growth and reduce long-term costs.

3. Risk (Ongoing): Currency volatility in key markets (Egypt, Ethiopia, DRC) remains the primary headwind to reported Rand earnings, though currently well-managed.

   
   

Lester Davids

Senior Investment Analyst: Unum Capital