Safaricom sees earnings surge as Ethiopia startup losses fall

Kenyan telecoms firm Safaricom said on Friday that its earnings could surge as much as 50% this financial year as it projected that losses in key expansion market Ethiopia would fall steeply.

Safaricom, partly owned by South Africa's Vodacom and Britain's Vodafone, launched in Ethiopia in 2022 as the government there opened up the tightly-controlled economy to foreign competition.

The company has had a bumpy ride in Ethiopia due to security, inflation and currency challenges, but it remains bullish that Africa's second most-populous nation will power future growth.

CEO Peter Ndegwa told a results presentation that the company was expecting group earnings before interest and taxes of 144-billion to 150-billion Kenyan shillings (R20.26bn to R21.10bn) in the year to the end of March 2026, excluding the hyper-inflationary impact from its Ethiopian business.

That compares with EBIT of 97.1-billion shillings (R13.66bn) in the year to end-March 2025 without the hyper-inflationary impact.

"We are pleased with our performance in FY25 despite the various challenges that faced the operating environment including economic disruptions, slowdown in GDP growth and impact of foreign exchange regime reforms in Ethiopia," Safaricom said in a statement.

Group service revenue grew more than 10% year-on-year to 371.4-billion shillings (R52.25bn) last financial year, while customer numbers increased 16% to 57.1-million (R8.03bn).

Safaricom's Kenya business continued to be the main profit driver last year, while the company invested in rolling out operations in Ethiopia.

This year, the company expects negative EBIT of between 23-billion and 26-billion shillings (R3.24bn to R3.66bn) in Ethiopia, compared to negative EBIT of about 61-billion (R8.58bn) last year.

"The exceptional performance in our Kenya business ... offset the foreign exchange corrections in Ethiopia," Ndegwa said.

Safaricom's board has proposed a final dividend of 0.65 shillings per ordinary share, making the total dividend for 2024-2025 similar to the previous year.