Safaricom, Kenya’s leading telecommunications provider, has reported a record-breaking financial year. Profits and revenues exceeded analyst expectations, and the company’s expansion in Ethiopia continues to weigh on overall group earnings [5,14].
Strong Financial Performance Amidst Regional Expansion
For the fiscal year ending March 2025, Safaricom posted a net profit of KSh 95.5 billion for its Kenyan operations, marking a 12.7% increase from the previous year’s KSh 84.7 billion and representing the company’s highest profit in over a decade [5,11]. On a consolidated group basis, which includes operations in Ethiopia and adjustments for currency reforms and hyperinflationary accounting, net income attributable to owners of the company rose 10.8% to KSh 69.8 billion [5,14]. These results exceeded market expectations and underscored Safaricom’s resilience and strategic agility in a challenging regional environment [5,14].
Key highlights:
- Net profit (Kenya): KSh 95.5 billion, up 12.7% year-on-year [5,11]
- Net profit (Group): KSh 69.8 billion, up 10.8% year-on-year [5,14]
- Total revenue (Kenya): KSh 381.2 billion, up 11.4% [5,11]
- Total revenue (Group): KSh 388.7 billion, up 11.2% [5, 12, 13]
The Impact of Challenges in Ethiopia
While Safaricom’s overall profit trajectory remains strong, its Ethiopian subsidiary continues to operate at a loss as the company invests heavily in network infrastructure, customer acquisition, and regulatory compliance. For the full year, Safaricom Ethiopia reported a significant loss, with guidance for EBIT (earnings before interest and tax) loss ranging from KSh 58 billion to KSh 61 billion, far exceeding the USD 50 million figure previously cited [8]. Despite these losses, management remains optimistic about Ethiopia’s long-term potential, emphasizing that this year marked the peak of losses and future contributions are expected to be accretive to the group [5, 8].
Challenges faced in Ethiopia include:
- Regulatory uncertainties and foreign exchange reforms impacting financials [7, 8]
- High infrastructure and operational costs during the market entry phase [8]
- Competitive landscape and evolving consumer preferences [8]
Strategic Initiatives Driving Growth
Safaricom’s robust performance is underpinned by several strategic initiatives:
- Enhanced Mobile Money Services: M-Pesa’s revenue grew by 15.2% YoY to KES 161.1 billion, contributing 44.2% of Kenya’s service revenue [13].
- Mobile Data Services: Mobile data revenue grew by 15.2 % to KES 72.9 billion as a result of increased 4G uptake [13].
- Market Diversification: Ongoing expansion in Ethiopia and innovation in financial and digital products continue to diversify revenue sources [8, 12].
Future Outlook
Safaricom’s management has reiterated its commitment to the Ethiopian market, viewing current losses as a strategic investment for long-term growth [5, 8]. The company plans further investment in digital services, data analytics, and technology upgrades to maintain its leadership in Kenya and expand its footprint across East Africa [5,].
Conclusion
Safaricom’s latest financial results demonstrate its resilience and strategic agility, with record profits in Kenya and solid group performance despite substantial startup losses in Ethiopia. The company’s diversified revenue streams, especially M-Pesa and mobile data, continue to drive growth. As Safaricom navigates regional complexities and invests in new technologies, it remains well-positioned for future expansion and innovation [5, 8, 14].
References:
–5 Bizna Kenya
–8 Mwango Capital
–11 The Star
–12 Kenyan Wallstreet
–13 Tech Africa News
–14 Mpasho
For further details, see Safaricom’s official financial results and investor presentations [6,10,16].
