Safaricom records 40% profit jump as Ethiopian business losses shrink

Safaricom's Ethiopian gamble is finally starting to look less like a drag and more like a growth engine.

The Kenyan telecoms giant, the country's most valuable listed company, reported on Thursday that group earnings before interest and taxes (EBIT) for the six months to the end of September jumped to 91.1 billion shillings (about $702 million), up from 65.2 billion a year earlier a rise of roughly 40%. Group service revenue grew 13% to 226.1 billion shillings.

Ethiopia: from cash burn to near break-even

The key turning point came from the north. Safaricom entered Ethiopia in 2022, when Addis Ababa began opening its long-restricted telecoms sector to foreign investors. For years since, start-up losses there weighed on group results.

In the first half, Ethiopia's EBIT loss narrowed from 24.3 billion shillings a year earlier to 11.4 billion a reduction of more than half. At the EBITDA level the improvement was even starker: losses shrank from about 12.3 billion shillings to just 434 million, a 96.5% swing. "You can see the reduction in Ethiopia's start-up losses beginning to really make an impact at group level, combined with a solid performance in Kenya," CEO Peter Ndegwa told a briefing.

Ethiopian service revenue soared 71.6% to 10.6 billion shillings, with mobile data revenue up 90.2% doing most of the heavy lifting. Active 90-day users rose 38.4% to 15.4 million.

Kenya: M-PESA breaks the 100 billion mark

The home market remains Safaricom's cash cow. Kenyan service revenue grew 11.3% to 216 billion shillings, and EBIT crossed 100 billion shillings in a half-year report for the first time, reaching 101.8 billion.

The real star was M-PESA. The mobile money platform's half-year revenue exceeded 100 billion shillings for the first time, hitting 100.1 billion up 13.6% year on year and accounting for 54.7% of the group's service revenue growth. In other words, for every extra 10 shillings Safaricom earns, more than five come from M-PESA.

Guidance held, but risks remain

Safaricom maintained its full-year EBIT guidance of 180–187 billion shillings and hopes Ethiopia will break even before the end of the financial year.

That path, however, is not without obstacles. A sharp depreciation of the Ethiopian birr, foreign-exchange shortages and security uncertainty could all affect the target. Analysts have differed widely on when Ethiopia will reach break-even, with forecasts ranging from the second half of this financial year to FY2028.

But for this half-year at least, Safaricom proved one thing: the story of East Africa's largest telecoms market is far from over.