Safaricom Group has reported a 17.7% decrease in its half-year net profit, down to Ksh 28.1 billion for the period ending September 30, 2024, primarily due to the depreciation of Ethiopia’s currency, the Birr, which significantly impacted earnings from its Ethiopian operations.
The Ethiopian Birr lost 106% of its value against the U.S. dollar over the past year, and is currently trading at 119.90. This currency devaluation hit Safaricom hard, resulting in an estimated impact of Ksh 17.5 billion.
Safaricom CEO Peter Ndegwa acknowledged the challenges posed by the Ethiopian market but emphasized the resilience of the company’s core Kenyan operations.
“On an underlying basis our business is fantastic with the show of real, strong momentum in Kenya. Most importantly we are proud of the value we have been able to offer to our customers,” Ndegwa stated. “We will continue simplifying our customer journeys and will intensify our focus on new growth areas to continue our momentum in the second half of the year.”
Due to the currency-related challenges, Safaricom has adjusted its break-even target for the Ethiopian market, now aiming for profitability by the financial year ending March 2027. Initially, the company had expected to reach break-even by March 2026,
Despite the Ethiopian currency impact, Safaricom’s Kenyan operations delivered a strong performance, with revenue rising by 12.9% to reach Ksh 177.5 billion over the six-month period. The company saw growth across its mobile connectivity services like voice, mobile, and fixed data, with revenues rising from Ksh 90.8 billion to Ksh 91.3 billion.
M-PESA revenues increased from Ksh 73.7 billion to Ksh 77.2 billion, driven by a rise in customer transactions and service adoption. The recent addition of MPESA Ratiba, a scheduling service introduced in October, has also boosted the service’s popularity, with over one million Kenyans opting in and more than Ksh 336 million transacted to date.
Mobile data revenue also saw a 20.2% growth, reaching Ksh 35.6 billion. Overall, earnings before interest and taxes (EBIT) increased by 18% to hit Ksh 79.2 billion.
Read: Safaricom Ethiopia Expands 4G Network to Somali Region
Looking forward, Ndegwa announced that the company will keep exploring innovative solutions to fuel its growth.
”As a telco, we are using artificial intelligence and big data to allow us to move away from one-size-fits-all all products to differentiated offerings that suit each customer.” Ndegwa said.
Meanwhile, Safaricom’s chairman, Adil Arshed Khawaja, revealed that the company is initiating its 2030 strategy. He highlighted that the 2020-2025 strategy, which successfully transformed Safaricom from a traditional telecom provider to a tech-driven business, is now nearing completion. The new strategy aims to establish Safaricom as Africa’s leading purpose-driven technology company by 2030.
”This fiscal year serves as the last for our 2020-2025 strategy,” Khawaja stated. “As we look towards 2030, we aim to be the leading purpose-led technology company in Africa, continuing to drive innovation and serve our customers with cutting-edge solutions.”