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Safaricom has lowered its profit expectations for the year and raised capital expenditure guidance as it invests in Kenyan and Ethiopian operations.
Safaricom Plc’s half-year profits declined 17.7% to KSh 28.1 billion from KSh 34.1 billion on account of the 106% depreciation of the Ethiopian Birr.
Service revenues increased by 12.9% to KSh 177.5 billion on the back of improved performance from all service lines coupled with robust growth in both customers and overall usage. High inflation and currency devaluation in Ethiopia affected earnings, as it cost the telco KSh 17.5 billion in 6 months by inflating local currency expenses and forex losses.
Safaricom has lowered its profit expectations for the year and raised capital expenditure guidance as it invests in Kenyan and Ethiopian operations.
The Ethiopian Birr depreciated against the dollar by 106%, closing in September at 118.99 from 57.69 in June 2024. In July, Ethiopia adopted a free-floating currency to reform the financial sector to secure funding from the IMF. Safaricom has lengthened its break-even target in Ethiopia by one year to March 2027, although it sees the impact of the birr’s exchange rate correction being much lower in full-year results.
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On the upside, the Kenyan business saw double-digit profit growth, increasing by 14.1% to KSh 47.5 billion driven by a surge in revenues.
