Safaricom Profits Soar as Ethiopia Approaches Break-Even
Safaricom Plc reported a profit before tax (PBT) of KES 81.32Bn in its half-year ending 30th September 2026 (HY2027), underpinned by robust growth in mobile service revenues, particularly from double-digit expansions in M-Pesa and mobile data revenues, and prudent cost management. Total mobile service revenue jumped by 12.4% to KES 213.68Bn, pushing the telco’s total revenue up 14.2% to KES 233,68Bn in HY2027.
Operating expenses declined by 11.1% to KES 44.54Bn in HY2027, marking a third consecutive period of cost reduction, largely driven by improved operational efficiency in Ethiopia as the business progresses toward break-even.
Overall, profits after tax (PAT) accelerated up by 72.5% to KES 50.35Bn in HY2027 from KES 29.19Bn in HY2026, further lifted by drops in Safaricom Ethiopia losses as it approaches break-even in full year 2027 (FY2027).
Safaricom Kenya’s PBT rose by 15.2% y-y to KES 96.92Bn, supported by double-digit growth in M-Pesa and data revenues, with M-Pesa service revenue surpassing KES 100Bn to hit KES 100.71Bn. Overall, Kenya’s net profits rose by 13.8% from KES 58.24Bn to KES 66.27Bn in HY2027.
Safaricom Ethiopia’s loss before tax narrowed by 43.8% to KES 16.28Bn, while net losses declined by 43.0% to KES 16.60Bn from KES 29.10Bn in HY2026. The subsidiary delivered an Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of KES 434.40Mn, nearing break-even, with management maintaining its EBITDA break-even target for March 2027.
The Ethiopia subsidiary saw its 90-day active customers increase by 38.4% y-y to 15.43Mn, and one-month active customers jump by 43.4% y-y to 12.20Mn.
Group EPS rose 35.5% y- from KES 1.07 to KES 1.45, implying an annualized FY2027 EPS of KES 2.90 versus KES 2.39 reported in FY2026. Continued growth in subscriber numbers and service usage is expected to drive earnings higher, with EPS likely to surpass KES 3.00 over the medium term. The telco is trading at a price-to-earnings (P/E) ratio of 12.14x and a price-to-book (P/B) ratio of 6.69x.
We retain a BUY RECOMMENDATION on Safaricom’s share price, with an implied value of KES 43.85 per share, representing 24.5% upside from the current price of KES 35.20 per share as of 5th November 2026.
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Segment Revenue Performance
a) M-Pesa Revenue
The telco’s mobile money (M-Pesa) revenue accelerated by 13.6% y-y, from KES 88.07Bn in HY2026 to KES 100.08Bn in HY2027, accounting for 44.3% of the Group’s service revenue, mainly from its innovative payment solutions.
One-month active M-Pesa customers increased by 11.7% y-y to 44.47Mn in HY2027, up from 39.82Mn in HY2026, while the agent network expanded by 10.0% to 351,160, reinforcing M-Pesa reach and accessibility across the country.
M-Pesa growth was largely driven by consumer payments, which went up 14.0% to KES 40.8Bn, business payments at 14.7% up to KES 31.0Bn, financial services 55.3% up to KES 7.1Bn, and global payments at 26.6% up to KES 2.8Bn, as withdrawals income narrowed marginally at 0.5% to KES 18.4Bn.
Consumer payments accounted for 40.8% of total M-Pesa revenue, or KES 40.8Bn, followed by business payments at 31.0% (KES 31.0Bn) and financial services at 18.4% (KES 18.4Bn).
Cumulatively, consumer and business payments and withdrawals accounted for 90.1%, or KES 90.2Bn, of the KES 100.1Bn in M-Pesa revenue.
Overall, M-Pesa average revenue per user (ARPU) rose 2.7% y-y from KES 388.29 to KES 398.96 per month for active users.
