Safaricom Plc expects to meet its March 2027 profit target in Ethiopia on significant loss reduction through six months to September, an outcome expected to cut the telecom funding pressure from the startup while widening revenues and improving shareholder pay.
Safaricom Telecommunications Ethiopia (STE) posted a significant 96.5 percent reduction in its pre-tax loss (earnings before interest, taxes, depreciation, and amortisation (EBITDA) in the startup to Sh434.4 million from a loss of Sh12.5 billion in September 2025.
The telco projects the Ethiopian unit will achieve net profits –after taxes and all costs– over the next three years.
The loss reduction is attributable to the subsidiary’s improved topline where revenues have improved significantly from increased customer signups and usage, especially mobile data.
Safaricom Ethiopia’s pre-tax losses peaked in September 2024 at Sh27.8 billion. The most recent pre-tax loss is the narrowest since the unit was established in 2022.
“The growth we have seen is based on three key drivers of growth. We have more users, more usage, and a higher rate. If you unpack it, all three drivers have been growth levers,” Wim Vanhelleputte, the chief executive officer of Safaricom Telecommunications Ethiopia said on Thursday.
Wim expects the continued momentum of customer signups and usage to push the Ethiopian business over the line to break even by March 31, 2027.
The number of 90-day active customers for STE rose 38.4 percent to 15.43 million from 11.15 million a year earlier, 12.15 million of whom were actively using mobile data-the largest revenue component for the business.
The average user of mobile data in Ethiopia consumed 14.8 percent more data than prior at 7.9 gigabytes from 6.8 gigabytes.
In contrast, STE reported only 170,000 active customers at the end of September 2022, with 110,000 of the customers actively using mobile data, while the average user only purchased 0.816 gigabytes of data (816 megabytes).
STE revenues rose 71.6 percent to Sh10.62 billion from Sh6.2 billion, with mobile data income rising 90.2 percent to Sh7.85 billion.
Voice revenues made the unit’s second largest income line, rising 20.9 percent to Sh1.66 billion.
Ethiopia’s M-Pesa revenues grew 15.7 percent but remained the unit’s lowest revenue line at Sh0.01 billion, trailing messaging revenues which stood at Sh0.13 billion.
Safaricom Plc chief finance and innovation officer Dilip Pal expects the Ethiopian startup to move to profitability at net income level within a few years after reaching the first key break-even marker.
“Ethiopia’s cost structures are quite good, and they are delivering a lot more efficiency. At a 60 percent contribution margin level, that means you start getting operating leverage and the sequence moves from EBITDA to EBIT, cash flow and then net income,” he said.
“I wouldn’t give a timeline, but normally any startup business reaches net profit in a two-to-three-year timeframe.” Profitability in Ethiopia will reduce Safaricom’s contribution to the funding of the unit, in which it holds a majority stake, while realised profits would add to group profitability.
The telecoms operator distributes 80 percent of its net income to shareholders as dividends and is expected to declare an interim payout in the first quarter of 2027.
“Our dividend policy has not changed, which is to payout 80 percent of consolidated net profit after tax, adjusted for minority interests,” Mr Pal added.
Safaricom Plc reported a 35.9 percent jump in half-year profit to the end of September 2026, driven by higher M-Pesa and mobile data revenues in Kenya, and the significant loss reduction in Ethiopia.
The group’s first-half net profit rose to Sh58.1 billion from Sh42.7 billion as sales from Kenya grew by 12.5 percent to Sh223.3 billion.
M-Pesa revenues rose 13.6 percent to cross the Sh100 billion mark for the first time at Sh100.1 billion from Sh94.7 billion on increased usage by businesses, cross-border payments and financial services like lending and asset management.
“These results reflect sustained growth in Kenya, lower startup costs in Ethiopia and disciplined strategy execution,” Peter Ndegwa, Safaricom Plc chief executive officer said.
