Safaricom reports mixed results for H1 2025, faces challenges in Ethiopia, Kenya

Feyisayo Ajayi -
Key Points
  • Safaricom reported a 15.07% revenue growth to Ksh189.42 billion ($1.47 billion) in H1 2025, driven by strong service revenue.
  • Net profit dropped 63.17% to Ksh10.01 billion ($77.75 million) due to higher costs and foreign exchange challenges.
  • CEO Peter Ndegwa emphasized resilience amid challenges, with total comprehensive income rising to Ksh138.23 billion ($1.07 billion).

Safaricom, East Africa’s largest telecom operator, led by Kenyan tycoon Peter Ndegwa, reported mixed financial results for the first half of the 2025 fiscal year, with revenue growth offset by a decline in profitability due to foreign exchange challenges in Ethiopia and a tough business environment in Kenya.

The company posted a 15.07 percent revenue increase to Ksh189.42 billion ($1.47 billion), up from Ksh164.62 billion ($1.28 billion) in the same period in 2023, driven by strong service revenue, which rose to Ksh179.92 billion ($1.4 billion).

Revenue increases, profit drops 63.17 percent

Safaricom’s service revenue increased by Ksh24.81 billion ($192.48 million), driven by growth in M-PESA, mobile data, and fixed data revenue. This reflects the company's strategic focus on digital financial services and connectivity expansion.

However, higher operating expenses and financing costs offset this growth. The company’s expansion into Ethiopia, along with increased network and infrastructure costs, contributed to the rise in expenses. Additionally, foreign exchange fluctuations added pressure on profitability, leading to a 63.17 percent drop in net profit.

Net profit fell from Ksh27.19 billion ($211.14 million) in H1 2024 to Ksh10.01 billion ($77.75 million) in H1 2025, reflecting challenges in Ethiopia's foreign exchange market and a difficult business environment in Kenya.

CEO highlights performance amid headwinds

Peter Ndegwa, Chief Executive Officer, acknowledged the challenges but praised the team's resilience.

“Our H1 2025 results reflect our commitment to delivering value during a challenging period,” Ndegwa said. “We aim to enhance customer experience and continue transforming lives,” he added.

Total comprehensive income for the period saw an impressive surge, reaching Ksh138.23 billion ($1.07 billion), up from Ksh46.86 billion, signaling resilience in other income streams despite decreased profit margins.

Safaricom’s mixed performance

Founded in 1993 and based in Nairobi, Safaricom offers mobile connectivity, cloud hosting, and the M-PESA payments platform.

Led by Peter Ndegwa, who holds a 0.016 percent stake (6,208,543 shares), the company is navigating the evolving telecom industry.

Safaricom reported a 24.65 percent decline in assets, from Ksh641.16 billion ($4.98 billion) on Mar. 31, 2024, to Ksh483.12 billion ($3.75 billion) by Sept. 30, 2024.

Its retained earnings, however, increased by 21.92 percent, rising from Ksh134.31 billion ($1.04 billion) to Ksh163.76 billion ($1.27 billion).