Vodacom Group reviewed annual results and cash dividend declaration for the year ended 31 March 2025

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Vodacom Group reviewed annual results and cash dividend declaration for the year ended 31 March 2025

8:32 CAT | 19 May 2025

FILE - "Businesses in Mozambique and DRC have been impacted by post-election tensions and conflict in eastern DRC respectively. With momentum behind peace efforts in both countries, we are hopeful of improved prospects into FY2026," Vodacom Group CEO Shameel Joosub commented. [File photo: Vodacom Mozambique] .

Monday, 19 May 2025

Highlights

Upgraded medium-term target of double-digit EBITDA growth*.

Group revenue of R152.2 billion was up 1.1% (10.9%*), despite significant foreign exchange headwinds.

Group service revenue declined 0.1% in rands, but increased 11.2%* on a normalised basis, above our medium-term target.

Financial services revenue increased 7.6% (17.6%*) to R14.0 billion, contributing 11.6% to Group service revenue.

Group EBITDA declined 1.1% to R55.5 billion but grew 7.8%* on a normalised basis.

Serve a combined 211.3 million customers and 87.7 million financial services customers, including Safaricom on a 100% basis.
HEPS of 857cps, reflecting strong growth in the second half.

Full year dividend of 620cps, up 5.1%.

Shameel Joosub, Vodacom Group CEO commented:

As we draw the curtain on our Vision 2025 strategy, I am immensely proud of the progress we have made over the past five years in delivering on our targets. This was achieved despite a challenging macroeconomic environment marked by a global health crisis, currency volatility, geopolitical tensions, inflationary pressures and protracted energy disruptions in South Africa. Through it all, our purpose – connecting people for a better future – has remained our true north, gathering a momentum of its own across each of the markets where we operate. Over the five-year period, we significantly expanded geographic and product diversification resulting in the number of customers using our networks, increasing from 115.5 million (FY2020) to 211.3 million (FY2025), while financial services customers rose from 53.2 million to 87.7 million, including Safaricom, over the same period. That said, we will not be resting on our laurels and now seek to ensure we deliver against our Vision 2030 ambitions, which include growing our customer base to 260 million and financial services customer base to 120 million. While cementing our leadership in all forms of connectivity, we expect our Group service revenue contribution from beyond mobile to increase to 30% from 21% today.

As part of Vision 2030, we upgrade our medium-term targets for Group service revenue and EBITDA from high single-digit to double-digit growth. Given significant currency volatility, I am particularly impressed with the strong finish the Group produced in the last six months, supporting the confidence we communicated in November last year that the organisation is poised for a stronger second half performance. Group service revenue grew by a robust 11.2%* on a normalised basis, highlighting the resilience of our diversified portfolio and our strong commercial execution. We closed the year with 8.2 million additional customers across our footprint – a 4.0% increase that underscores our relentless focus on customer-centricity, network reliability and digital inclusion.

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 South Africa and the outstanding, continued growth in Egypt and Tanzania. As one might expect, our businesses in Mozambique and DRC have been impacted by post-election tensions and conflict in eastern DRC respectively. With momentum behind peace efforts in both countries, we are hopeful of improved prospects into FY2026. We remain particularly encouraged by the strong performance in Egypt, which delivered a stellar 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 over 50 million customers and a significant improvement in net promoter scores, Egypt now accounts for 23.0% of Group service revenue. The return to currency stability is expected to underscore a more positive macroeconomic trajectory.

Our South African business demonstrated continued resilience, achieving service revenue growth of 2.3%, led by a recovery in the prepaid segment, sustained data traffic growth of over 36.4%, and the increasing contribution of our beyond mobile services. These services – encompassing financial and digital services, fixed and IoT – contributed R11.2 billion, or 17.8% of South Africa’s service revenue. The successful execution of seasonal campaigns, combined with an industry leading response to power grid stability, supported an increase in EBITDA of 2.3% in South Africa, while we invested R11.6 billion to further enhance network resilience and spectrum efficiency. Consistent with our Group-wide focus on sharing, we have approached the Competition Commission in South Africa to advance meaningful sharing opportunities with MTN South Africa, under the provisions of government’s Energy Users Block Exemption regulation.

Our International business, spanning across DRC, Lesotho, Mozambique and Tanzania, achieved 7.1%* normalised service revenue growth. Tanzania was the standout performer, delivering service revenue growth of 20.5% and EBITDA growth of 25.2% in shillings. Lesotho and DRC grew service revenue by 10.4% and 8.2% respectively, in local currency, showcasing good commercial momentum. While we remain hopeful of a recovery in Mozambique and sustained resolution in DRC, we are actively supporting our people and communities in the affected regions, including through our Foundation initiatives. M-Pesa continues to solidify its leadership as Africa’s largest mobile money platform. Across our markets, M-Pesa processed over US$450.8 billion in transaction value over the year, reflecting 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 R22.6 billion of financial services revenue. These results underscore the growing demand for payments, savings, lending, and merchant solutions across our footprint.

In Ethiopia, we recorded a 103.2% increase in our 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%, with strong ARPU growth adding to the customer gains. As the second most populous country in Africa, Ethiopia remains integral to our long-term growth ambitions, and we are encouraged by the market’s response to our entry and the regulatory strides being made. Safaricom delivered an excellent performance in Kenya, with service revenue up 10.5% in shillings, supported by strong data and M-Pesa growth. While a currency devaluation in Ethiopia impacted Group earnings in the first half of the financial year, Safaricom delivered a strong recovery in the second half, contributing to Group earnings growth for the full year. From a financial perspective, the Group reported headline earnings per share (HEPS) of 857cps, up 1.3%, reflecting a strong second half performance. In line with our dividend policy of paying out at least 75% of HEPS, the Board has declared a final dividend of 335 cps, bringing the total dividend for the year to 620 cps.

While we were disappointed by the decision by the Competition Tribunal to prohibit our proposed acquisition of a stake in Maziv, we have lodged an appeal with the Competition Appeal Court. Given that fibre is a critical enabler of inclusive economic growth, we remain steadfast in our belief that this transaction holds significant public interest and pro-competitive benefits.

Over the past five years, we continued to invest significantly in infrastructure and expect to spend more than R20.0 billion in capital expenditure in the new financial year – reinforcing our commitment to connectivity, digital inclusion, and economic empowerment. We are particularly proud of our Tech for Good and purpose-led initiatives like m-mama, Code Like a Girl, Techstart and Je Suis Cap, which continue to transform lives across Africa, and have our sights firmly focused on upskilling one million young people to help bridge the digital skills gap.

We are laying the groundwork for the Group’s next phase – Vision 2030 – which will remain anchored in our purpose with the next chapter defined by:

Empowering people; protecting the planet and maintaining trust (our purpose pillars)

Elevating customer experience

Innovating for growth

Investing in strategic enablers for growth and efficiency

Despite current financial market turbulence, we are confident in the structural growth opportunity that Africa represents. Our leading market positions combined with a diversified portfolio that leverages a best-in-class digital and financial ecosystem positions us well to capture this opportunity and continue making a meaningful impact across the continent.

Source: Vodacom Group / Media Release