Illustrative image | The Vodacom World mall in Midrand, Johannesburg. (Photo: Waldo Swiegers / Bloomberg via Getty Images) | Maziv, the parent company of Vumatel and Dark Fibre Africa. (Photo: Maziv) 
Vodacom’s interim results presentation was a masterclass in narrative management. The numbers are good; great, even. Double-digit revenue growth, 32% higher headline earnings, and a dividend up 15.8%. But buried in the footnotes and pro forma sections are the seeds of future dilution and a few warning signs about how those targets are being maintained.
Vodacom wants you to focus on its Vision 2030 (connecting 260 million customers and accelerating financial inclusion), but the real story is hidden behind the vernacular of “normalised growth”, which politely excludes inconvenient costs: currency shocks, acquisitions, spectrum purchases, hyperinflation and exceptional items.
It’s this sanitised version of growth that props up the “ahead of target” claim.
It’s a Maziv deal
The Maziv deal, for instance, is framed as nation-building, accelerating network expansion and job creation, but the financial disclosures quietly prepare investors for earnings dilution in the next financial year.
Vodacom’s contribution of R4.9-billion in fibre assets and R7.9-billion in cash will increase net debt slightly and cause a small dip in return on capital employed.
Management calls it “immaterial” in the short term, but it’s a signal that future headline earnings per share will take a hit before any synergy benefits arrive.
So, while Vodacom CEO Shameel Joosub talks about connecting for a better future, the accounts warn that FY27 will be a little less connected to shareholder returns.
Ethiopian drag
The other dilution story is one Vodacom can’t quite normalise away: Safaricom. Losses there are “moderating”, management insists, but they’re still dragging on group profits and dividend momentum. Breakeven is now expected by FY27, the same year Maziv’s dilution kicks in.
Ethiopia’s customer base jumped 84% to 11.1 million, which sounds impressive until you remember that it’s a greenfield operation in a country where infrastructure build-out costs remain high and forex conditions are volatile.
It’s a double bind: the expansion into Ethiopia is necessary for long-term growth, but for the next two years it will be a persistent weight on operating profit; what accountants politely call non-recurring dilution.
One-offs that aren’t really one-offs
In South Africa, Vodacom’s Earnings Before Interest, Taxes, Depreciation, and Amortisation fell 5.3% thanks to a “one-off cost”. The group doesn’t specify what it was, just that it contributed to lower earnings. Speculation is rife that this is the Please Call Me settlement, but Vodacom has neither confirmed nor denied it due to a non-disclosure agreement.
Combined with sluggish 2.2% service revenue growth locally, it suggests Vodacom’s home market is feeling the strain of load shedding, inflation and prepaid churn.
Calling it a once-off makes it disappear from the headline story, but it’s another piece of the real puzzle: core market underperformance masked by regional growth and accounting adjustments.
The asterisk economy
Every time you see an asterisk in Vodacom’s results, read it as a caveat. “Normalised growth” excludes the messy parts of doing business in emerging markets.
Spectrum purchases? Not counted.
Hyperinflation? Ignored.
M&A impact? Deferred.
That’s how Vodacom can report 14.8% growth while its South African segment declines and Ethiopia bleeds cash. It’s selective storytelling.
Vodacom trumpets its generous 330 cents per share interim dividend, up 15.8%. But even here there’s nuance. The group admits that last year’s payout ratio was adjusted upward to “mitigate the phasing of Ethiopia losses”. In other words, they paid more to keep investors sweet while a new market expansion was burning cash.
It’s a classic defensive play: over-distribute now to maintain sentiment, then absorb the dilution later when Maziv and Safaricom Ethiopia are fully consolidated.
Reading between the lines
Look, Vodacom’s results are solid, but they’re also engineered for shareholder smiles.
The company has built a cushion of credibility through consistent dividend policy and regional diversification, but its disclosure style signals caution.
Investors are being told (albeit very quietly) that FY27 will bring structural dilution, that Ethiopia’s break-even still hinges on perfect execution, and that “normalised growth” might not feel so normal when spectrum auctions or inflation spikes hit.
For now, Joosub gets to stand on the podium with rising profits, a relatively clean Please Call Me settlement, and Africa’s largest mobile money platform.
But the asterisks in this report are the real headline: the fine print that hints at slower returns once the fibre dust settles. DM
NB: Investors should review the full interim results booklet/presentation (including footnotes) for pro-forma and normalised details.