Ethio Telecom’s historic IPO has opened up the country’s telecom sector to private ownership but falls short of fundraising targets.
- •In October 2024, Ethio Telecom launched Ethiopia’s first-ever Initial Public Offering (IPO), offering 100 million ordinary shares at a price of 300 birr (US$2.54) per share.
- •The offering, running until 14th February 2025, was restricted to Ethiopian citizens living within the country, with minimum investments set at 33 shares and maximum investments capped at 3,333 shares per person.
- •Only 10.7% of shares were sold, raising approximately 3.2bn birr (US$24m) from 47,377 investors.
Why the Modest Uptake?
- •Investor Restrictions: Excluding diaspora and foreign investors narrowed the pool of potential buyers.
- •Low Public Awareness: IPOs remain unfamiliar to the Ethiopian public.
- •Investment Limits: Maximum investment caps discouraged high-net-worth individuals from deeper participation.
While the IPO’s immediate financial outcome was limited, its significance in Ethiopia’s economic liberalization drive is widely acknowledged. The Ethiopian Securities Exchange (ESX) is expected to play a crucial role in building a dynamic capital market.
Income Statement Summary (Millions Birr)
| Metric | 30 June 2021 | 30 June 2022 | 30 June 2023 | 30 June 2024 |
|---|---|---|---|---|
| Revenue | 55,499 | 59,448 (+7.1%) | 71,526 (+20.3%) | 91,371 (+27.8%) |
| Operating Expenses | (19,415) | (20,872) (+7.5%) | (20,311) (−2.7%) | (28,607) (+40.9%) |
| EBITDA | 28,850 | 31,414 (+8.9%) | 37,620 (+19.8%) | 41,220 (+9.6%) |
| Operating Profit | 22,497 | 24,782 (+10.2%) | 31,123 (+25.6%) | 32,858 (+5.6%) |
| Profit Before Tax | 12,528 | 17,834 (+42.3%) | 28,187 (+58.0%) | 29,790 (+5.7%) |
| Profit After Tax | 5,583 | 8,999 (+61.2%) | 18,028 (+100.3%) | 19,013 (+5.5%) |
- •Revenue surged by 27.8% in 2024, driven by subscriber growth and mobile money expansion.
- •Strong EBITDA margins underscore operational efficiency.
- •Profit after tax more than doubled between 2022 and 2024.
| Metric | 30 June 2021 | 30 June 2022 | 30 June 2023 | 30 June 2024 |
| Total Assets | 171,641 | 189,018 (+10.1%) | 199,660 (+5.6%) | 214,192 (+7.3%) |
| Total Liabilities | 76,363 | 87,463 (+14.6%) | 95,380 (+9.0%) | 100,698 (+5.6%) |
| Total Equity | 95,277 | 101,555 (+6.6%) | 104,280 (+2.7%) | 113,494 (+8.8%) |
Highlights:
- •Asset growth remained steady, reflecting ongoing infrastructure investments.
- •Equity base crossed 113bn birr by mid-2024.
- •Reduced borrowings helped preserve financial resilience.
Ethio Telecom has outlined several strategic initiatives to build on the momentum:
- •Second Offering: Plans to offer an additional 45% stake to foreign investors, unlocking fresh capital inflows.
- •Exchange Listing: Aiming for a full listing on the Ethiopian Securities Exchange (ESX), which targets hosting up to 50 listed companies within five years.
- •Mobile Money Growth: Telebirr, the company’s mobile money platform, has surpassed 51 million subscribers and now handles over 1 trillion birr in transactions, positioning Ethio Telecom as a fintech leader on the continent.
Ethio Telecom’s IPO may have fallen short of initial expectations, but it represents a critical milestone in Ethiopia’s broader economic transformation. The company’s robust financial performance, expanding equity base, and ambitious strategic direction offer a solid foundation for future growth.
As Ethiopia builds a modern capital market infrastructure, Ethio Telecom’s journey will serve as a template for future privatisations and public listings.
