Safaricom eyes Ethiopia profitability in 2027, to launch Fuliza next week

SAFARICOM expects to become profitable in the Ethiopian market in the financial year 2027, management now says, as it continues with key investments in the country amid an expanding customer base.

The firm which on Friday announced a net income growth of 10.8 per cent for the year ended March 2025, to Sh69.8 billion, plans to lunch its overdraft facility in Ethiopia next week.

This, as it sets the capital expenditure (Capex) guidance for Ethiopia in the financial year 2026 at between Sh18 billion and Sh21billion, as it expects to cut losses in the markets occasioned by heavy investments it has made since commencing commercial operations in October 2022.

Ethiopia Earnings Before Interest and Taxes (EBIT) loss in expected to be in the range of Sh26 billion and Sh23 billion.

Capex guidance for Kenya is expected to be in the range of Sh54billion and Sh57 billion (Sh72billion-Sh78 billion for group) with EBIT for the group expected to hit Sh150 billion.

Customer numbers in the second most populous country in Africa, after Nigeria, grew to 8.8 million as of March this year, less than three years since the telco’s entry.

This is a 103.2  per cent year-on-year growth compared to same period last year with Safaricom becoming the first private telecom operator to break the state-owned monopoly of Ethio Telecom. 

Safaricom Ethiopia has since focused on expanding its network and launching services, including mobile money services (M-PESA), whose registered customers grew by more than 68 per cent to 2.4 million.

The Mpesa value in the country during the period under review hit Sh20.6 billion with about 164.6 million in transaction volumes.

“In Ethiopia, we have seen some good traction from the government in addressing external imbalances that existed to improve the business environment. Ethiopia will be incurring much lower losses, as also evident from the guidance that we have given. So target is financial year 2027,” Ndegwa said. 

The telco targets between 15 million and 17 million customers in Ethiopia in the short-term. 

“If we go to 17 million customers, thats about half of what we have in Kenya in just a couple of years. So it shows that our franchise, both in Kenya and Ethiopia is very healthy and strong and growing,” said Ndegwa. 

In Kenya, the value of disbursed funds under Fuliza hit Sh981.b billion up from Sh801.6 billion in 2024, with a value repayment of Sh996.7 billion up from Sh801.6 billion. 

This, as Safaricom recorded Sh38.3 trillion in Mpesa transactions value for the year ended March 2025 up from Sh37.7 trillion last year. 

With a diverse population of approximately about 120 million people, Ndegwa said Ethiopia presents great opportunities for the firm’s business, especially as it targets the youthful market.

As we adopt a regional approach, we are well-positioned to scale and transform Ethiopia's digital future. As we stay committed to this investment for our shareholders, investors and business, I am happy with the remarkable progress we have made in Ethiopia. Our 4G network now covers 50 per cent of the population with over 3,100 active base stations,” he said.

The firm has reported a group total revenue growth of  11.2 per cent to Sh388.7 billion in the financial year 2025, with Ethiopia accounting for 10 per cent of its revenues even as forex regime changes in the country weighed down overall performance in the year.

Service revenue went up 10.8 per cent to Sh371.4 billion, voice revenue 1.8 per cent up to Sh81.9 billion while M-Pesa revenue increased 15.1 per cent to Sh161.1 billion. Mobile data revenue increased 16.5 per cent to Sh78.5 billion.

With the strong performance, the board has recommend a final dividend of Sh0.65 per ordinary share (2024: Sh0.65) amounting to a total of Sh26.04 billion, maintaining the previous financial year numbers despite Birr depreciation impact in Ethiopia.

As of March 2025, the Ethiopian Birr depreciated by 117.1 per cent year-on-year from 57.29 to 125.25 against the dollar. This sharp depreciation followed the forex regime reforms which were aimed to current instability.

“We are pleased with our performance.This has been delivered on the back drop of various challenges faced in the period, from our operating environment including, economic disruptions, slowdown in GDP growth and impact of foreign exchange regime reforms of Ethiopia currency,” Chief Financial Officer, Dilip Pal, said.