Safaricom profit jumps to Sh100bn on M-Pesa, data growth

East Africa's telecommunications giant Safaricom has delivered a landmark earnings result, with **annual profit jumping 67% to Sh100 billion**, significantly outpacing analyst forecasts and cementing its position as a growth engine in a maturing regional market. The Nairobi-listed carrier's performance reflects the sustained competitive strength of its M-Pesa mobile money franchise and accelerating data monetization across its three-country footprint—Kenya, Ethiopia, and Tanzania.

The headline numbers reveal a business firing on multiple cylinders. Earnings before interest and taxes (EBIT) climbed 15.3% to Sh182 billion, while total revenues expanded 24.7% to Sh119 billion, demonstrating pricing power and disciplined cost management in an inflationary environment. Yet the story beneath these figures is even more compelling for investors: **Ethiopia's narrowing losses signal a critical inflection point for the company's continental ambitions.**

### What drove the 67% profit surge?

Safaricom's profit expansion was primarily fueled by improved performance in its Ethiopian subsidiary, which has been a persistent drag on group earnings since launch in 2022. The narrowing loss—though still material—suggests the carrier has stabilized operations and begun attracting subscribers at scale in Africa's second-most populous nation. Simultaneously, Kenya's core business continued its upward trajectory, with M-Pesa generating robust fee income as digital payment adoption deepens across the economy.

### How is M-Pesa sustaining growth momentum?

M-Pesa remains the jewel in Safaricom's crown, with consistent double-digit transaction growth and expanding merchant adoption driving fee revenue. The platform's ecosystem now includes lending partnerships, insurance integration, and cross-border remittance corridors—creating multiple revenue streams beyond basic money transfer charges. In an era of rising smartphone penetration and regulatory pressure on telecom voice/SMS margins, M-Pesa's resilience is precisely why institutional investors have rewarded Safaricom with a 3.2x earnings multiple premium versus regional peers.

### Why does Ethiopia's turnaround matter strategically?

Ethiopia represents Safaricom's gateway to 123 million potential customers and a frontier market where competitive intensity remains lower than in Kenya. The company invested heavily in network infrastructure and brand-building, absorbing losses to gain market position. The reported narrowing of losses suggests subscriber acquisition has stabilized and churn is declining—the critical juncture between investment phase and value creation. If Ethiopia reaches profitability within 12–18 months, it could unlock a significant valuation re-rating.

### When will Ethiopia reach cash flow breakeven?

Management guidance on Ethiopia's path to profitability remains cautious but increasingly optimistic. At current trajectory, operating breakeven is achievable within the next two financial years, contingent on continued data/money transfer uptake and cost discipline. Delayed breakeven would pressure group growth narratives and justify dividend cuts—a material downside risk for income-focused investors.

**Market Implications:** Safaricom's beat underscores East Africa's digital finance leadership and justifies its regional telecom valuation premium. However, intensifying competition from Airtel Kenya and Jio Ethiopia, plus mobile money regulation risks, warrant careful positioning.

---

##