Vodacom Group (5VD) Q2 2027 Earnings Report

The call was strongly optimistic, with broad-based revenue, EBITDA, cash flow, customer, financial services, and international growth, alongside a larger and more diversified portfolio after the Safaricom transaction. Management reaffirmed medium-term growth guidance and highlighted progress on cost savings and operating leverage. Key challenges include the ongoing legal process around Safaricom, higher leverage, South African prepaid voice declines and competitive pressure, Egyptian FX exposure and investment needs, and regulatory uncertainty in South Africa. Overall, the highlights significantly outweighed the lowlights.

Vodacom targets double-digit service revenue growth and early teens growth for EBITDA and operating free cash flow over the medium term, while maintaining disciplined capital intensity; for South Africa, it targets ZAR 1.9 billion of savings for the year and expects margins at levels of around 37%, with 38% will be a stretch, while contract is expected to grow at roughly about 3.5%; in Egypt, Q3 service revenue growth should be more or less similar or slightly lower than Q2, no other price increases are expected, with any further price increases into next year at the earliest depending on the inflationary environment, Vodafone Cash growth is expected to continue strong into the second half, investment should step down slightly, and the company should start to see a bit of a margin improvement in the second half of the year; Vodafone Egypt’s margin of 45% is a credible margin, Safaricom is expected to break even in EBITDA this year, the revised dividend payout ratio is 65%, and there is still scope to grow the FY 2027 total dividend from FY 2026.