Safaricom earnings hit Ksh.58.2B as M-Pesa revenue crosses Ksh.100B

The performance was driven by growth in its Kenyan business, rising M-Pesa revenues and significant improvement in its Ethiopian operation, which is now edging closer to breaking even.

According to the half-year results, the group's service revenue grew by 13.1 per cent to Ksh.226.1 billion, while earnings before interest, tax, depreciation and amortisation rose by 27.5 per cent to Ksh.129.2 billion.

Safaricom Group CEO Peter Ndegwa attributed the performance to the company's execution strategy and increased customer engagement.

“This has been supported by disciplined execution and stronger customer engagement. You saw we are growing customers, we are growing usage and we are actually reducing price, making the business much more affordable,” Ndegwa said.

Kenya remained the group's biggest earnings driver, recording service revenue of Ksh.216 billion, an 11.3 per cent increase.

Earnings before interest and tax crossed the Ksh.100 billion mark for the first time in a six-month reporting period, reaching Ksh.101.8 billion.

M-Pesa also strengthened its contribution, with revenue growing by 13.6 per cent to Ksh.100.1 billion, crossing the Ksh.100 billion mark for the first time in a half-year period.

Safaricom Chief Finance Officer Dilip Pal said the company was expanding its existing services while exploring new areas to meet customers' financial needs.

“While we are expanding the business we already have, I think the newer areas are also beginning to show up. So for us, all financial needs of customers is what we are trying to fulfil,” Pal said.

In Ethiopia, service revenue surged by 71.6 per cent to Ksh.10.6 billion, supported by a growing customer base of 15.4 million.

More significantly, losses narrowed by 96.5 per cent to Ksh.434.4 million, bringing the operation closer to breaking even.

Pal said the company would continue investing in Ethiopia, supported by improved financial performance.

“So you can imagine we will also be investing in Ethiopia, but we will be investing on the position of strength, on the position of the balance sheet strength and the profitability strength of Ethiopia, going beyond the investment phase that we have done,” he said.

In the second half of the financial year, Safaricom plans to scale up broadband and digital services, deploy more artificial intelligence and push its Ethiopian business towards breaking even by the end of the financial year.