Vodacom interim profit surges on Safaricom deal as net debt jumps to R135.6 billion

Vodacom Group has reported one of its strongest interim performances on record, driven by the consolidation of its Kenyan subsidiary Safaricom, though the acquisition remains the subject of a high-stakes legal battle.

The South African telecommunications giant posted revenue of R102.5 billion for the six months ended 30 September, a 25.6% increase on the previous year. EBITDA rose 40% to R42.7 billion, and headline earnings per share grew 25.7% to 587 cents.

The board declared an interim dividend of 355 cents a share, reflecting the financial impact of bringing Safaricom’s results fully onto the group’s balance sheet for the first time.

Vodacom increased its effective shareholding in Safaricom from about 35% to 55% on 30 June 2026. The transaction transformed the Kenyan operator from an associate into a subsidiary, allowing Vodacom to consolidate its earnings.

Safaricom emerged as the primary growth engine during the period, delivering 13.1% service revenue growth and 27.5% EBITDA growth. Net profit attributable to equity holders at Safaricom rose by 35.9%.

The acquisition also dramatically expanded the group’s financial services footprint. Vodacom’s financial services revenue nearly doubled to R15.9 billion. The combined Vodacom-Safaricom platform now serves 108 million financial services customers and processes more than US$575 billion (R9.4 trillion) in annual transaction value, largely driven by the M-Pesa mobile money ecosystem.

Vodacom Group chief executive Shameel Joosub said the strategic rationale for the acquisition remained intact despite the legal challenge. He noted that the deal enhances the company’s exposure to high-growth markets and significantly expands its financial services presence.

The expansion is central to Vodacom’s Vision 2030 strategy to become a broader pan-African technology and fintech company rather than a traditional mobile operator. The group’s total customer base reached 250 million, up 11.8%, with Safaricom providing greater access to Kenya and Ethiopia, two of Africa’s fastest-growing telecommunications markets.

The financial gains came with a substantial cost to the balance sheet. Vodacom disclosed that the Safaricom transaction involved total invested capital of about R153.4 billion. This included R25.8 billion paid for the Kenyan government’s 15% stake, the revaluation of existing interests and the assumption of debt.

As a result, Vodacom’s net debt surged by R78.8 billion year-on-year to R135.6 billion. The group’s leverage ratio rose from 0.9 times to 1.6 times EBITDA. The acquisition was funded partly through R35 billion in new debt and included the consolidation of Safaricom’s debt obligations.

Vodacom also acquired rights to a portion of future Safaricom dividend payments from the Kenyan government for an upfront consideration of R5.1 billion. The structure of this deal remains subject to the ongoing appeal process.

The acquisition is under threat following a ruling by Kenya’s High Court in September, which declared the purchase of the government’s stake unlawful and null and void. Vodacom and the Kenyan government have appealed the ruling, and the Court of Appeal has ordered that the status quo be maintained pending the outcome of the expedited appeal.

Vodacom continues to consolidate Safaricom because the shares remain registered in its name. The group acknowledged that if the appeal fails, the accounting treatment and broader implications of the acquisition would need to be reassessed. An appeal date is expected to be set before the end of December 2026.

Appeals have been filed by the government of Kenya, Vodafone Group and Vodafone Kenya.

As reported by the Sunday World on 10 November 2026, the interim results highlight the growth potential of the East African market while underscoring the regulatory risks facing South African companies operating across borders.