Kenyan telecommunications company Safaricom SCOM.NR announced on Friday that it anticipates a potential increase in earnings of up to 50% for the current financial year, as it expects significant reductions in losses from its key expansion market, Ethiopia.
Safaricom, which is partially owned by South Africa’s Vodacom VODJ.J and Britain’s Vodafone VOD.L, commenced operations in Ethiopia in 2022 following the government’s decision to liberalise the previously restricted economy to foreign competition.
Despite facing challenges in Ethiopia, including security issues, inflation, and currency fluctuations, the company remains optimistic that this nation, the second most populous in Africa, will drive future growth.
Chief Executive Officer Peter Ndegwa indicated during a results presentation that the company projects group earnings before interest and taxes (EBIT) to be between 144 billion and 150 billion Kenyan shillings ($1.12 billion-$1.16 billion) for the fiscal year ending March 2026, excluding the hyper inflationary effects from its Ethiopian operations.
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The group’s service revenue rose by over 10% year-on-year to 371.4 billion shillings in the last financial year, with customer numbers growing by 16% to 57.1 million. Safaricom’s operations in Kenya remained the primary source of profit last year, while the company continued to invest in expanding its presence in Ethiopia.
For the current year, the company anticipates a negative EBIT ranging from 23 billion to 26 billion shillings in Ethiopia, a significant improvement from the negative EBIT of approximately 61 billion recorded last year.
