Vodacom Group (VOD) H1 2025 earnings summary

Executive summary

• Group revenue increased 1.0% to R73.5 billion, with normalised growth of 10.4% year-over-year, despite significant currency headwinds, especially in Egypt and Ethiopia.

• Financial services and beyond mobile segments drove growth, with financial services customers up 12.7% to 83 million and service revenue contribution rising to 11.4%.

• Net profit attributable to equity holders fell 18.4% to R6.8 billion, mainly due to FX losses, higher finance costs, and DRC one-offs.

• Headline earnings per share (HEPS) declined 19.4% to 353c, but would have increased 11.4% excluding FX headwinds.

• Interim dividend of 285c per share declared, representing an 86% payout ratio.

Financial highlights

• Service revenue decreased 1.2% to R58.6 billion (up 9.9% normalised); EBITDA down 2.7% to R26.6 billion (up 8.5% normalised).

• Operating profit dropped 5.2% to R16.1 billion (up 9.8% normalised); net profit from associates and JVs fell 39%.

• Free cash flow was negative R1.1 billion, impacted by working capital absorption and Egypt currency devaluation.

• Net debt/EBITDA stable at 1.1x; R14 billion of debt refinanced.

• Capital expenditure was R8.8 billion, representing 12.0% of revenue.

Outlook and guidance

• Medium-term targets reaffirmed: high single-digit group service revenue and EBITDA growth, capital intensity at 13%-14.5% of revenue.

• Beyond mobile services expected to contribute 25-30% of group service revenue, with financial services mid-teens.

• Group is positioned for improved free cash flow and earnings in the second half, with currency headwinds expected to moderate.

• Safaricom upgraded Kenya guidance and revised Ethiopia guidance due to currency moves.