Safaricom Group Net Profit for Half Year period ending 31st September 2025 rose 52% to KSh 42.8bn, powered by double-digit growth in Data and M-Pesa revenues. This is despite a Net Loss of KSh 15.5 billion from its struggling Ethiopian subsidiary, against KSh 58.2 billion revenues contributed by the Kenyan business.
This is the highest year-on-year jump in net profit in 18 years for Safaricom since its Initial Public Offer(IPO). On the flip side, the Ethiopian business is still struggling mainly due to depreciation of its Birr currency, which when adjusted cuts the subsidiary’s net losses to KSh 8.7 Billion.
Safaricom Group’s Service Revenues grew 11.1% to KSh 199.9 Billion, with the Kenyan business bringing in KSh 194 billion against Ethiopia’s KSh 6.2 Billion. The Ethiopian outfit also posted loss before interest and taxes of KSh 24.3 Billion against an EBIT from the Kenyan operation which stood at KSh 89.5 Billion. EBIT indicates a company’ ability to generate profits from its operations, thus a negative means the Ethiopian business is yet to break-even.
Safaricom Kenya posted a 22.6% growth in net profit to KSh 52.8 Billion, as the operators maintains its market dominance in the Kenyan market.
Safaricom’s total funding position also looks impressive, with funds from its consortium partners at US$ 2.27 billion with an additional US$ 410 Million added in the period under review. This funding has mostly been done through equity, with consortium members contributing US$ 2.1 billion and Safaricom Plc pumping in US$ 1,037 billion.
“Safaricom Group’s half year 2026 performance reflects resilient fundamentals, margin recovery, and strategic foresight. Its investments in Ethiopia are transitioning from capital strain to value creation, while domestic operations continue to post solid profitability. With gross margins expanding and net margins stabilizing, Safaricom is well-positioned for sustainable earnings growth and enhanced shareholder value,” said CFA Dedan Maina.
In an investor brief, Mr Maina said Safaricom’s Gross Profit Margin has maintained a consistent upward trend over the last five years, reflecting stronger operational efficiency and growth in high-margin segments such as Mpesa and data. “The improvement signifies solid core business performance, better return on investments, and lower direct costs per shilling of revenue, even as capital outlays in Ethiopia continue,” said the investment insider.
Safaricom Group financials also show that its half-year net profit margins have been declining from 30.2% in 2022 to 20.9% at the close of six months ending September 31st 2025.
Analysts attribute this declining trend in the Group’s Net Profit Margin(NPM) in recent years primarily to its heavy capital expenditure and start-up costs associated with Safaricom Ethiopia.
However, the downtrend is narrowing, suggesting that while the Group continues to deploy capital to cement its regional footprint, operational cash inflows are beginning to catch up.
This narrowing decline signals stabilization in cost pressure, implying that the heavy frontloaded investment phase in Ethiopia is approaching a turning point toward cash generation and scalability. Safaricom Ethiopia remains a key long-term growth driver. NPM is a crucial metric that indicates how effectively a company converts revenues to profit, ability to manage costs, pricing and operational efficiency.
Safaricom Investments in Ethiopia to Breakeven 2027
The initial years of the Kenyan operator’s entry into Ethiopia were capital-intensive, but strategic positioning is now yielding traction in subscriber acquisition and service uptake.
A notable macroeconomic tailwind is emerging. The Ethiopian Birr, which had depreciated significantly in prior years, is showing signs of stabilization.
The Ethiopian Government’s decision to curb foreign borrowing is expected to ease pressure on the currency, improving exchange-rate predictability.
As a result, translational losses (from currency conversion in reporting) are less likely to evolve into transactional losses, thus mitigating earnings volatility for Safaricom.
Experts maintain that this stabilization enhances Safaricom’s regional exposure profile and may support earnings translation into the Group’s consolidated results in coming periods.
The Kenyan mobile giant is expected to shorten its breakeven timelines in Ethiopia, boosted by its continued rollout drive, coupled with currency stability, all likely to improve contribution margins.
“The Ethiopia business continues to demonstrate encouraging momentum as we deepen our presence and relevance in one of Africa’s most promising markets. The steady expansion of our network strengthened partnerships with local agents and distributors, and a clear focus on financial inclusion are driving strong customer engagement. We are seeing positive shifts in brand perception and ecosystem collaboration, which give us confidence that Safaricom Ethiopia is on a sustainable path to scale,” said Dr. Peter Ndegwa, Safaricom Group CEO.
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