Kenya's Safaricom beats operating profit guidance as Ethiopia business narrows losses

Thu, 07th May 2026 09:14

* Safaricom's Ethiopia unit narrows losses, targets EBIT break-even by March 2027

* Group service revenue up 11%, net income rises 67%, dividend per share increased

* Kenya ‌to sell 15% Safaricom stake to Vodacom, pending regulatory approval

NAIROBI, May ⁠7 (Reuters) - Kenyan telecoms group Safaricom beat guidance on annual ⁠operating profit on Thursday and said it expected it to be higher in the 2026/27 financial year as its Ethiopia business narrowed losses, driving its shares up as much as 8%.

Group earnings before interest and taxes (EBIT) rose 59% to 153.9 billion ‌shillings ($1.2 billion) in the full-year to end-March, surpassing its guidance of between 144 billion and 150 billion shillings for the year and driving its shares up.

Safaricom forecast EBIT of 180 billion to 187 billion shillings for the year ending March 2027, during which it expects its Ethiopia operations to break even.

"The Ethiopia business is on a clear trajectory towards earnings ‌before interest, tax and depreciation, which you call EBIT breakeven, which I know is a very important parameter for investors," Group Chief ‌Financial Officer Dilip Pal said at a briefing for investors.

The Ethiopian unit narrowed its operating loss to 30.1 billion shillings from 61.1 billion shillings a year earlier.

Safaricom, partly owned by South Africa's Vodacom and Britain's Vodafone, launched in Ethiopia in 2022 as the government there opened the closely controlled ‌economy to foreign competition.

It has had a bumpy ride there due to high inflation, security issues and currency fluctuations, but it remains bullish that Africa's second-most-populous nation will bolster future growth.

Group service revenue ⁠jumped 11% ⁠to 414.1 billion shillings, while net income was up 67% ‌at 99.7 billion shillings, it said.

The group recommended a dividend of 2.00 shillings per share, up 67% from the year to end-March 2025. In December, Kenya's government said it would sell a 15% ‌stake in Safaricom to Vodacom for about $1.6 billion, which would reduce its stake to 20%. The sale is still awaiting regulatory approval.