• Vodacom announced a 9.6 percent decline in group profits for the quarter ended September 2024.
• This is despite a respectable performance in South Africa, with prepaid customers growing to 42.3 million. million
• Amid the ongoing legal battle against Nkosana Makate, Vodacom says it doesn’t know how much money it will have to pay him for Please Call Me.

South Africa’s Vodacom has seen its profits dip and announce a fall in headline earnings per share surely disappointing investors as the R29 billion spectre of its going legal battle with Please Call Me creator Nkosana Makate looms overhead.

Vodacom stock was trading down 5.20 percent as of press time, Monday morning.

The operator announced group profits of R16.2 billion, a decline of 9.6 percent compared to the same period a year prior, while headline earnings (a marker for long-term profitability) sat at 353 cents per share – a 19.4 percent decline – mostly impacted by Safaricom establishing a foothold in Ethiopia and depreciation of currencies in its rest of Africa markets, such as Egypt.

“This was largely attributable to the currency depreciation in Ethiopia (53cps) and one-off costs in our International business. Given the expected phasing impact of the currency deprecation in Ethiopia on headline earnings for the full financial year, the Board declared an interim dividend of 285cps equating to an 86% pay-out,” wrote CEO Shameel Joosub in its results marked 30th September 2024.

Vodacom celebrated a 4.2 percent increase in its South African subscriber base despite the disappointing profits, now serving 49.2 million subscribers. South Africans also spent over R31 billion in prepaid mobile data in the quarter.

It says it now has 42.3 million prepaid customers in South Africa alone. South Africans on Vodacom networks were also using mobile data 32.4 percent more in the latest quarter.

Meanwhile Vodacom Business saw revenues decline by 4 percent to R8.3 billion “reflecting pressure on wholesale revenue,” the results read.

Its South African profits specifically rose by 2.4 percent to R9.8 billion, while its Egyptian market saw a 11.7 percent rise in profits to R4.65 billion. The only African market that saw lost money was Mozambique, where revenues dropped 16.8 percent to R2.8 billion.

Vodacom battles for Please Call Me billions

Vodacom made a point to discuss the situation around Makate and Please Call Me in its results as it has the potential to affect investors. Especially if the Supreme Court of Appeal’s judgement that Makate is entitled to a minimum of R29 billion from Vodacom for not paying him for his Please Call Me idea since 2001.

The telecom admits that as the legal battle continues, with multiple parties declaring different compensation numbers of Makate – Vodacom believes he should only get around R47 million while Makate asked the Constitutional Court for R9.4 billion – “the range of the possible compensation outcomes in this matter is very wide.”

Makate’s case against Vodacom has been ongoing since 2008. In 2016, the Constitutional Court ordered Vodacom to pay Makate for Please Call Me, and Vodacom has launched appeal after appeal since then to avoid paying an uncomfortable amount.

Vodacom’s majority owner Vodafone, a British company, reported in May 2024 yearly earnings of just under $12 billion.