Vodacom, SA’s largest mobile network provider, predicts that earnings and headline earnings per share will increase by between 20% and 25% for the year to March, in line with its Vision 2030 ambitions.
As of mid-morning, its share price was up 3.15%. Over five years, the stock has gained 15.76%.
However, there is “noise” in the company’s headline earnings per share (HEPS) figure. This is due to once-off items in the previous reporting period, which would trim growth of this key metric if the figures were normalised to strip out these items, says Peter Takaendesa, chief investment officer at Mergence Investment Managers.
In a shareholder announcement this morning, Vodacom said HEPS should come in at between 1 028c and 1 071c, compared with the 857c reported a year ago. For earnings per share (EPS), it anticipates a range of between 1 031c and 1 074c, up from 859c.
Mike Gresty, fund manager at Anchor Capital, says the trading update is guiding to HEPS growth of 22.5% to 1 050c at the mid-point. “This looks like a solid beat,” he says, noting consensus was 997c a share.
Gresty notes that, although the statement to shareholders this morning didn’t provide information on the growth drivers, this is “likely driven by continued strong operational momentum from Egypt”. He adds that Egypt’s recent currency exchange stability helps the country support Vodacom’s financial performance much more than it has in the past.
Beating currency blues
Vodacom’s other African operations have also had a much better year, both from a currency and operational perspective, Gresty adds.
Takaendesa notes that the Democratic Republic of Congo adversely affected the company’s results last year. Vodacom is dealing with structural pressure, including tax, regulatory, currency and operating environment issues in the central African country.
Ethiopia has also adversely affected the company’s results, says Takaendesa. Vodacom’s results for the year to March 2025 show it experienced both start-up challenges and currency devaluation in the east African country.
However, this unit is now moving towards a “strong growth trajectory and experiencing a sea change in investor sentiment,” writes chairman Saki Macozoma in the annual report.
The mobile operator, which has 220 million clients across Africa, entered Ethiopia in May 2021 through its stake in a Safaricom-led consortium that won the licence, launching commercially in October 2022. It is still classified as a “new entrant” market.
Vodacom directly owns 5.74% of Safaricom Ethiopia and, through Safaricom’s 55.7% stake, has additional indirect exposure, giving it a total effective stake of about 25%. Smartphone penetration is at 53.8%, with 1.2 million financial services customers in the country.
Local weaknesses
Gresty says all eyes will be on SA “where there is weakness in prepaid as the large operators have lost market share to Telkom and virtual network operators, which has translated into generally disappointing topline growth over the last year.
“Signs of an acceleration in SA growth momentum would likely be an important positive catalyst for investors when Vodacom reports.”
Takaendesa says it seems that EBITDA “growth is likely in line with company guidance and market consensus expectations, driven by stronger rest of Africa operations offsetting weaker SA performance”.
“Telcos have had a stronger operational performance over the past 12 months, driven largely by price increases in the rest of Africa region,” Takaendesa says, adding that the outlook, especially in oil import-dependent countries, will be key.
Seeking growth
Vodacom is targeting double-digit EBITDA growth on a normalised basis for the next four years under its Vision 2030 plan, which aims to transform it from a traditional telco into a leading African technology company. It is targeting 260 million customers and R200 billion in revenue by 2030.
It reported income of R152.2 billion in 2025.
Vision 2030 is set to be driven by an expansion of financial services, stronger 4G/5G connectivity, and AI-driven operations, with Egypt expected to contribute about 23% of group service revenue by 2030.
Vodacom’s full year results will be published on 11 May.
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