Vodacom pins hopes on Egypt and Tanzania to fuel growth

Vodacom is hopeful that operations in Egypt and Tanzania will help to drive growth in this financial year — with the group beginning to rely less on its SA market for growth.

CEO Shameel Joosub said on Monday that recent currency market stability, particularly in Egypt, “bodes well for the group’s performance in the foreseeable future. So too does the resilient performance in SA and the outstanding, continued growth in Egypt and Tanzania.”

He said Vodacom’s businesses in Mozambique and Democratic Republic of Congo (DRC) were affected by post-election tension and conflict in eastern DRC, respectively.

“With momentum behind peace efforts in both countries, we are hopeful of improved prospects into full-year 2026.”

A stronger second half helped Vodacom Group grow its annual earnings by 7.8% on a normalised basis, the group reported.

Earnings before interest, tax, depreciation and amortisation (ebitda) grew 7.8% to R55.5bn, though it was down 1.1% on a reported basis.

Normalised growth presents performance on a comparable basis and adjusts for trading foreign exchange, foreign currency fluctuation, hyperinflation accounting and excludes the effect of merger, acquisition and disposal activities.

Revenue for the year to end-March was 10.9% on a normalised basis at R152.2bn, while service revenue grew 11.2% to R120.7bn.

Headline earnings per share (HEPS) were 1.3% higher at 857c. A final dividend of 335c per share was declared, taking the total dividend to 620c, up 5.1% year on year.

Group service revenue grew 11.2% on a normalised basis, “highlighting the resilience of our diversified portfolio and our strong commercial execution”, with 8.2-million customers being added to the base, a 4% increase.

Egypt delivered a 45.2% increase in local currency service revenue, buoyed by increased uptake of Vodafone Cash and the growing demand for mobile and fixed connectivity. With more than 50-million customers, Egypt now accounts for 23% of group service revenue.

The SA business reported service revenue growth of 2.3%, led by a recovery in the prepaid segment, sustained data traffic growth of more than 36.4%, and the increasing contribution of its beyond mobile services. These services contributed R11.2bn, or 17.8% of SA’s service revenue.

The international business — spanning DRC, Lesotho, Mozambique and Tanzania — achieved 7.1% normalised service revenue growth, with Tanzania the standout performer.

M-Pesa processed more than $450.8bn in transaction value in the year — an 18.3% increase. Revenue from financial services grew 17.6% on a normalised basis, accounting for 11.6% of group service revenue. Additionally, Safaricom reported R22.6bn of financial services revenue.

In Ethiopia, Vodacom recorded a 103.2% increase in its customer base to 8.8-million, driven by growing demand for connectivity and a promising commercial trajectory. Service revenue in local currency increased 238.9%.

As part of the group’s Vision 2030 strategy it is targeting growing its customer base to 260-million and financial services customer base to 120-million.

Vodacom shares were up 0.61% by the close at R133.14.

mackenziej@arena.africa; gavazam@businesslive.co.za