Safaricom, the Kenyan telecoms giant and East Africa’s most valuable listed company,
posted a 67 percent jump in annual net income on Thursday, smashing analyst
forecasts and providing the clearest signal yet that its long, costly bet on Ethiopia is
finally turning a corner.
Group net income rose to 99.7 billion shillings — about $770 million — for the financial
year ending March 2026, the company said in its full-year results released this morning.
Earnings before interest and taxes climbed 59 percent to 153.9 billion shillings, or
roughly $1.2 billion, while group service revenue grew 11 percent to 414.1 billion
shillings.
The Kenya business, the bedrock of Safaricom’s empire, continued to fire on every
cylinder. Service revenue from the home market hit 400.8 billion shillings, up 10 percent
year-on-year, while Kenya net income surged 24.7 percent to 119.1 billion shillings. MPesa, the mobile money platform that has become a case study in financial inclusion
the world over, and the booming data business were the standout drivers.
But the headline that has investors paying attention is Ethiopia. Safaricom’s expansion
into Africa’s second most populous country has been a slow, expensive and politically
fraught undertaking, defined by currency controls, security worries and regulatory
uncertainty. The Ethiopian unit’s earnings before interest and taxes loss narrowed
sharply to 30.1 billion shillings, less than half the 61.1 billion shillings it bled the previous
year.
For shareholders who have watched the Ethiopia investment drag on group margins for
three straight years, the halving of losses is a meaningful psychological turning point. It
suggests that the operational thesis — that Ethiopia would eventually mature into a
second engine of growth alongside Kenya — is no longer just a slide in an investor
deck.
Chief executive Peter Ndegwa told analysts on a call Thursday morning that the
company is now seeing real customer traction in Ethiopia, with subscriber growth, MPesa take-up and data usage all moving in the right direction. The company has been
pushing aggressively on rural coverage and price competitiveness against the stateowned incumbent Ethio Telecom.
The results land at a moment of broader optimism for African corporates with crossborder ambitions. Investors have been waiting for proof that pan-African expansion
strategies, which have humbled more than one corporate giant in the past decade, can
actually deliver. Safaricom’s numbers will reverberate well beyond Nairobi.
Shares in Safaricom, which trade on the Nairobi Securities Exchange and form the
largest single component of the local index, are likely to be in heavy demand at
Thursday’s open. Analysts at several Nairobi brokerages had expected a strong
number, but the 67 percent profit jump still came in ahead of consensus.
The company also flagged that it intends to maintain a strong dividend payout, a pledge
that should reassure pension funds and retail investors who have ridden out the
volatility of the Ethiopia investment cycle. Safaricom’s full-year dividend has been a
staple of the Kenyan retail investment calendar for years.
If the Ethiopia turnaround continues at its current pace, Safaricom could find itself in the
rare position of running two scaled-up profitable telco operations across Africa’s two
most economically important regional markets. For a continent often characterised in
headlines by what it lacks, Thursday’s numbers are a reminder of what is being built.
