Safaricom PLC’s half-year profits [H1 2024] declined 17.7% to KES 28.1 billion ($216.6 million) from KES 34.1 billion ($262.8 million) on account of the 106% depreciation of the Ethiopian Birr.
According to Safaricom, its Ethiopian subsidiary recorded a 47.3% increase in customers over the six months ending in September 2024. This growth has raised the number of monthly active users in Ethiopia to 6.1 million while the company also announced that it now reaches 46% of the country’s population.
Safaricom’s competitor in Ethiopia, Ethio Telecom, revealed in its 2023/2024 year results that it has 78.3 million subscribers.
🇪🇹 MILESTONE | Over $44 Billion Transacted Through TeleBirr Since its Introduction in 2021, Says Ethiopia’s Top Telco
Revenue for the financial year 2023/2024 increased by 21.7% compared to the results announced the previous year [2022/2023], reaching Birr 93.7 billion ($1.64… pic.twitter.com/CwzA4Fqkw1
— BitKE (@BitcoinKE) July 17, 2024
High inflation and currency devaluation in Ethiopia impacted earnings, costing the telecom company KES 17.5 billion ($134.9 million) over the six-month period due to inflated local currency expenses and foreign exchange losses.
The Ethiopian Birr depreciated by 106% against the dollar, closing September at 118.99, compared to 57.69 in June 2024. In July 2024, Ethiopia adopted a free-floating currency as part of its efforts to reform the financial sector and secure funding from the IMF.
🇪🇹REGULATION | Ethiopia Floats Exchange Rate in a Significant Policy Shift as it Intensifies Reforms Towards a Free Market Economy
According to a separate statement by Prime Minister of #Ethiopia, Abiy Ahmed, the new exchange rate system aims to align the Ethiopian currency… pic.twitter.com/q7i8aBqSzH
— BitKE (@BitcoinKE) July 29, 2024
Nonetheless, the company reported growth across its product offerings in the Ethiopian business.
Voice revenue increased by 27.1% to $4.01 million ( KES 516.4 million), fueled by higher usage and a growing customer base, while one-month active voice customers grew by 63.8% to reach 3.57 million.
Safaricom Ethiopia’s one-month active mobile data customers more than doubled during the period, rising from 1.4 million to 3.5 million. Usage per subscriber also surged, doubling to 6.56 GB, which contributed to a 10.8% increase in Average Revenue Per User (ARPU).
M-PESA revenue for the half-year totaled $189,100 (KES 24.4 million), with 8.31 million registered customers.
Meanwhile, mobile data revenue saw a significant increase, rising from $10.3 million (KES 1.32 billion) in the first six months to $25 million (KES 3.22 billion), driven by strong usage, customer growth, and initiatives to increase smartphone penetration.
The telco has implemented several measures to reduce the short-term effects of ongoing foreign exchange reforms. These include renegotiating contracts denominated in foreign currency, engaging local suppliers for certain products and services, and reducing its expatriate workforce.
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