Vodacom Group, Africa's largest mobile operator, announced a revision to its dividend payout policy and a significant increase in its revenue target. The company now aims to pay out at least 70% of its headline earnings in dividends, a reduction from the previous minimum of 80%. This strategic shift is intended to free up capital, approximately 50 billion rand ($2.7 billion), over the next three years, which will be reinvested into expanding its network and services across its African markets.
Alongside the revised dividend policy, Vodacom lifted its medium-term revenue target to 340 billion rand ($18 billion) by March 2027, an increase from its prior goal of 200 billion rand. This ambitious new target follows the successful integration of Vodafone Egypt and the acquisition of a stake in a fiber company. Vodacom's CEO, Shameel Joosub, stated that the company is transitioning from a telecommunications provider to a technology company, emphasizing growth in areas like financial services, digital services, and its Internet of Things platform across its various territories including South Africa, Tanzania, and the Democratic Republic of Congo.
Despite the reduction in the payout ratio, Vodacom's stock, traded on the Johannesburg Stock Exchange, saw a slight increase of 0.4% in early trading. Analysts from JPMorgan Cazenove noted that the lowered payout ratio was largely anticipated by the market, potentially mitigating any negative investor reaction. The company's enhanced revenue targets are well-received, particularly given its expanded operational footprint and strategic focus on diversification beyond traditional voice and data services. Vodacom reported impressive full-year 2026 results, with EPS reaching R10.69, a 24% increase in net income to R20.6 billion, and a 10% rise in revenue to R167.7 billion. The company also declared a final dividend of R4.05, representing a 21% increase from the previous year.
