Vodacom Reports Strong EBITDA Growth but Debt Rises After Safaricom Acquisition Amid Legal Challenge

Vodacom Group announced six-month results to September 30, 2026, showing earnings before interest, taxes, depreciation and amortisation (EBITDA) of R42.7 billion, up 40 per cent year-on-year, and group revenue of R102.5 billion, up 25.6 per cent.

The figures include Safaricom, which became a Vodacom subsidiary on June 30, 2026 after the South African operator raised its stake to 55 per cent, but they do not reflect a full six months of Safaricom’s contribution; on a pro-forma basis assuming Safaricom had been consolidated for the whole period, EBITDA would have risen 18 per cent and service revenue 13.3 per cent.

Safaricom’s own half-year results reported service revenue of KSh226.1 billion, up 13.1 per cent, EBITDA of KSh129.2 billion, up 27.5 per cent, net income of KSh58.2 billion, up 35.9 per cent, and operating free-cash flow of KSh74.5 billion, up 59.1 per cent.

The Kenyan operator’s service revenue comprised KSh216 billion from Kenya and KSh10.6 billion from Ethiopia; Ethiopia’s revenue grew 71.6 per cent, its EBITDA loss narrowed 96.5 per cent to KSh434.4 million, but it still recorded an EBIT loss of KSh11.4 billion and a net loss of KSh8.8 billion, with an EBITDA breakeven target set for the end of FY 2027.

Vodacom’s total customer base reached 250 million, up 11.8 per cent, and the group added 19 million smartphone users, while financial-services revenue rose 99 per cent to R15.9 billion and its financial-services customer base grew to 108 million, up 15 per cent.

M-PESA revenue increased 13.6 per cent to KSh100.1 billion and chargeable transactions rose 48.2 per cent to 12.9 billion, while wider financial-services revenue grew 55.3 per cent to KSh7.1 billion; the platform processed KSh41.68 trillion across 46.4 billion transactions in the year to March 2026 and served 3.13 million merchants.

The Safaricom transaction lifted Vodacom’s net debt to R135.6 billion, an increase of R78.8 billion year-on-year, of which R35 billion was used to fund the acquisition, including R9 billion raised through preference shares, and the group recognised R72.8 billion in fair-value adjustments for its previously held interest.

Operating free-cash flow for the period was R16.9 billion, capital expenditure was R13.3 billion, the EBITDA margin improved to 41.6 per cent from 37.3 per cent, and an interim dividend of 355 cents per share was declared, up 7.6 per cent; Vodacom set a medium-term target of early-teens pro-forma EBITDA growth.

Vodacom chief executive Shameel Joosub said the Safaricom transaction “further enhances our earnings profile, broadens our exposure to attractive high-growth markets and materially increases the contribution from financial services and digital businesses”.

The acquisition remains subject to a legal challenge; in September 2026 the High Court declared the Kenyan government’s disposal of a 15 per cent Safaricom stake null and void, and the Court of Appeal ordered the parties to maintain the status quo pending the appeal, leaving Vodacom as the registered holder of the 55 per cent stake.

The deal involved 8.01 billion shares purchased for KSh204.3 billion together with a KSh40.2 billion dividend-rights arrangement, while the government retains a 20 per cent holding.

Safaricom shareholders approved 14 special resolutions in July that formalised governance arrangements, and Vodacom executives Mariam Cassim and Matimba Mbungela subsequently joined Safaricom’s board.