Safaricom Plc said its losses in Ethiopia fell by more than half in the six months to September. The improvement helped the Kenyan telecom group post a 36% rise in first-half net profit, to 58.2 billion Kenyan shillings (about $448 million).

Safaricom Ethiopia’s loss before interest and taxes narrowed to 11.4 billion shillings (about $88 million), down from 24.3 billion shillings a year earlier. That is a 53% drop. The company says it still expects the Ethiopian business to break even by the end of the current financial year.

At group level, earnings before interest and taxes (EBIT) rose 40% to 91.1 billion shillings ($702 million), up from 65.2 billion shillings in the same period last year. Group service revenue grew 13% to 226.1 billion shillings.

Chief Executive Peter Ndegwa told a results briefing in Nairobi on Thursday that the shrinking start-up losses in Ethiopia were now visibly lifting group earnings. He also credited a solid performance in Kenya, the company’s home market.

Safaricom kept its full-year EBIT guidance of 180 billion to 187 billion shillings.

The results are the clearest sign yet that Safaricom’s bet on Ethiopia is starting to pay off. The company entered the market in 2022, when Ethiopia began opening its tightly controlled telecom sector to foreign competition and ended state-owned Ethio Telecom’s long monopoly.

The Ethiopian unit carried heavy start-up costs for its first years, including network rollout, licensing and building a customer base, and those costs weighed on group earnings. Safaricom sees Africa’s second-most populous country as a key source of future growth. Halving the loss in a year suggests the business is moving from expansion toward running at a sustainable scale.

If the unit breaks even as planned, Safaricom Ethiopia would become one of the most closely watched cases of foreign direct investment from Ethiopia’s economic liberalisation. That matters for a market still drawing in foreign capital as it builds out its financial and capital markets.

Safaricom is majority-owned by South Africa’s Vodacom Group and is Kenya’s largest listed company by market value.

($1 = 129.85 Kenyan shillings)