East Africa: Safaricom’s projected profits weighed down by Ethiopia losses

Safaricom, Kenya’s main telecommunications company, reported a slight increase in profits, although affected by the poor performance of its Ethiopian subsidiary.

The company revealed a profit of Ksh62.99 billion for the period under review, representing a modest increase from Ksh62.26 billion in the previous year.

However, Safaricom’s Ethiopian subsidiary, in which it holds a 51 percent stake, incurred a hefty loss of Ksh 21.7 billion, putting downward pressure on the group’s overall financial performance.

Of particular interest is Safaricom’s resurgence in profitability after three consecutive years of losses, with profits surpassing the $1 billion threshold.

“We are very pleased with what we have been able to achieve as a group despite the significant start-up costs in our business in Ethiopia. We expect that from 2025, Ethiopia will begin to contribute significantly to growth at the group level, both for revenue and profitability. the results,” Safaricom said in a statement.

Anticipating a major shift, the company expects Ethiopia to emerge as a major growth driver from 2025 onwards, contributing substantially to both results and revenues.

M-Pesa, Safaricom’s flagship mobile money service, emerged as the top revenue generator, surpassing the 40 per cent milestone in service revenue contribution.

Profits rose to Sh139.9 billion, constituting 42 percent of Safaricom’s total service revenue, a notable increase from 19.36 percent a year earlier.

The M-Pesa ecosystem saw further expansion, with transaction values ​​and volumes increasing by 9.6 percent and 33.9 percent year-on-year, culminating in Sh40.2 trillion and 28.3 billion transactions, respectively. .