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Safaricom profit rises in Kenya, Ethiopia startup costs impact group

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Kenyan-based operator Safaricom reported strong earnings in Kenya for the year ended March 31, 2024, and believes its Ethiopian business will start being a significant growth contributor from 2025 onwards.

Safaricom Group reported revenue growth of 13.4% to 335.4 billion Kenyan shillings (US$2.53 billion) for the year, as its home market helped cushion costs incurred in the emerging Ethiopian business.

Safaricom's fintech service, M-Pesa, contributed 42.4% of total revenue, at KES140 billion ($1 billion), and the GSM business contributed 52.7%, at KES173.9 billion ($1.31 billion).

"We are extremely pleased with what we have been able to achieve as a group despite the significant startup costs in our Ethiopia business. We expect that from 2025, Ethiopia will start being a significant growth contributor at group level for both top and bottom line," Safaricom CEO Peter Ndegwa said.

Safaricom, which is partly owned by South Africa's Vodacom and UK-based Vodafone, said earnings before interest and tax (EBIT) had reached KES139.9 billion ($1 billion) in Kenya, making it the first company in the region to pass the billion-dollar mark.

At a group level, incorporating the startup costs and investments in Safaricom Ethiopia, the group closed at an EBIT of KES94.9 billion ($716.5 million), a 3.5% growth year-on-year (YoY).

"This performance was driven by customer segmentation, public sector digitization, investments in new technologies and better use of data and analytics to understand and serve customers better," the group said.

EBIT indicates operating profits and is a measure of how efficiently the management has been utilizing investor funds.

Safaricom's earnings in Kenya helped cushion costs incurred in the emerging Ethiopian business.   (Source: Safaricom results statement for the year ended March 31, 2024)
Safaricom's earnings in Kenya helped cushion costs incurred in the emerging Ethiopian business.
(Source: Safaricom results statement for the year ended March 31, 2024)

Ndegwa spoke during the results announcement in Nairobi and said that the company's vision of being a purpose-led technology company was a key factor in investment in new technologies that have enabled creating more efficiencies and better customer engagement.

"We are able to anticipate and serve our customers more intuitively, while engaging our communities to solve their societal challenges. As a result of our razor-sharp focus on our customers, we are now a billion-dollar business in Kenya," Ndegwa noted.

Overall group customers grew 6.8% YoY to 49 million while one-month active customers grew by 9.1% YoY to 37.7 million. Safaricom Kenya also grew its total customer base to 44.7 million.

Listed on the Nairobi Securities Exchange, Safaricom provides connectivity across 2G, 3G, 4G and 5G in aggregate, covering over 99% of Kenya's population.

Ethiopia business grows but faces competition

Safaricom Ethiopia launched in the latter part of 2022, first rolling out in the city of Dire Dawa in August 2022 and then launching its national network in the capital, Addis Ababa, and ten other cities in October 2022.

After about a year and a half in operation, Safaricom Ethiopia had 4.4 million 90-day active customers, and its network in the Horn of Africa nation was currently covering 40% of the population. M-Pesa had 4.5 million registered customers in the country and "is growing rapidly."

"We are hence pleased with commercial momentum in Ethiopia and proud that we have been able to deliver this momentum with a Safaricom Ethiopia team that is 90% Ethiopians," Ndegwa added.

Safaricom became Ethiopia's second operator after a consortium it led was awarded a telecom license in May 2021 as part of Ethiopia's strategy to liberalize its telecom sector.

However, competition is incoming after the country launched a tender process for a second independent telecom license in July 2023.

State-owned Ethio Telecom is leading the market with 74.6 million telecom subscribers at the end of December 2023, with 71.7 million mobile voice subscribers and 36.4 million data and Internet users.

Ethio Telecom is also looking for an investor to buy a 45% equity share in the company.


Follow Connecting Africa on our new X account @connect__africa to get the latest telecoms and tech news across Africa.


Safaricom's major investor, Vodacom, will announce its full-year results on Monday.

Yesterday, pan-African operator Airtel Africa reported a revenue dip of 5.3% to $4.98 billion, hit by significant currency devaluations in Nigeria, Malawi, Zambia, and Kenya, despite growing subscribers across the region over the past year.

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*Top image is of Safaricom CEO Peter Ndegwa at the results presentation in Nairobi, Kenya. (Source: Safaricom.)

— Paula Gilbert, Editor, Connecting Africa

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