Kenyan telecoms giant Safaricom posted a 59% rise in annual pretax earnings, supported by strong growth in service revenue and a sharp reduction in losses from its Ethiopian business, the company said on Thursday.
Earnings before interest and taxes (EBIT) rose to 153.9 billion Kenyan shillings ($1.2 billion) in the financial year ended March, up from the previous year, underscoring the company’s continued dominance in East Africa’s telecommunications market.
The company’s expansion into Ethiopia, which had weighed heavily on earnings since launch, showed signs of improvement during the year. Safaricom said losses from its Ethiopian unit narrowed to 30.1 billion shillings from 61.1 billion shillings a year earlier.
Safaricom, partly owned by South Africa’s Vodacom and Britain’s Vodafone, entered Ethiopia in 2022 after the government liberalised the country’s tightly controlled telecoms industry and allowed foreign operators into the market for the first time.
The Ethiopia venture represents one of the company’s biggest growth bets, but also one of its most expensive undertakings due to heavy spending on infrastructure, spectrum licences and network rollout. The operation has nonetheless steadily expanded its customer base and network coverage as it competes against state-owned Ethio Telecom.
Group service revenue increased 11% to 414.1 billion shillings during the year, driven by growth in mobile data, voice services and mobile money transactions.
Net income climbed 67% to 99.7 billion shillings, according to Chief Executive Officer Peter Ndegwa, who spoke during a post-results investor briefing.
Ndegwa said the company’s performance reflected resilient demand for digital and financial services across its markets despite economic pressures facing consumers and businesses.
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Safaricom remains Kenya’s dominant telecoms operator, with its mobile money platform M-Pesa continuing to serve as a key revenue driver. The platform has transformed financial transactions in Kenya by enabling millions of users to send money, make payments and access financial services through mobile phones.
Analysts have closely monitored the profitability of Safaricom’s Ethiopia business since its launch because the operation initially dragged down overall group earnings. Thursday’s results suggest the subsidiary is moving closer to stabilisation as subscriber growth accelerates and operational costs begin to ease.
The company has continued to invest aggressively in Ethiopia by expanding base stations, strengthening network quality and increasing distribution channels in urban and rural areas.
Safaricom’s latest results also come as the Kenyan government pursues plans to reduce its shareholding in the company.
In December, Kenya’s government announced plans to sell a 15% stake in Safaricom to Vodacom for about $1.6 billion. The transaction would reduce the government’s stake in the telecoms operator to 20% from the current 35%.
The proposed sale forms part of efforts by the Kenyan government to raise revenue and restructure some state investments. However, the transaction still requires regulatory approval and remains subject to an ongoing court challenge.
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Investors are expected to focus on whether Safaricom can sustain profit growth while continuing to finance expansion in Ethiopia and invest in next-generation digital services across the region.
The company has increasingly positioned itself as a technology and financial services provider rather than solely a traditional telecoms operator, with growing emphasis on data services, enterprise solutions and digital payments.
Safaricom’s strong annual performance reinforces its position as one of East Africa’s most profitable companies and highlights the strategic importance of Ethiopia’s vast telecoms market to its long-term growth ambitions.
