Safaricom posts net profit fall to Sh52.5 billion for a third consecutive year
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Safaricom Plc, Kenya’s biggest company by market value, reported a drop in full-year profit for a third consecutive year
Safaricom Plc, Kenya’s biggest company by market value, reported a drop in full-year profit for a third consecutive year.
Safaricom has posted a decline in net profit for the full year ended March 2023, the third consecutive drop in earnings attributed to heavy capital investments in Ethiopia.
Profitability stood at Sh52.48 billion, down from Sh67.49 billion posted in the previous period.
The drop in profit has been attributed to inflation pressures on customers’ spending and high investment cost in Ethiopia.
The revenue growth was underpinned by robust growth in M-Pesa and data revenue.
Revenue from M-Pesa grew by 8.8 percent to Sh117.2 billion, whilst income from mobile data grew by 10.7 percent to Sh53.6 billion, the first time that revenue from mobile data has crossed the Sh50 billion mark.
The performance results were released Thursday morning as Ethiopia’s banking regulator, the National Bank of Ethiopia, announced granting the telco a licence to roll out M-Pesa mobile money services in the country.
The licence cost Safaricom $150 million (Sh20.5 billion at the current exchange rates).
Safaricom rolled out operations in Ethiopia about seven months ago and projects that the unit will break even after four years of operations. The unit posted a net loss of Sh21.7 billion.
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The Kenyan unit posted a KSh74.5 billion profit buoyed by strong growth in mobile data and mobile money.
Safaricom said overall group customers grew 8.1% to 45.89 million while one-month active customers grew 5.3% YoY to 34.54 million.
“We are committed to continue investing in our network infrastructure, broadening our product range, and leveraging emerging technologies to enhance our participation in the digital ecosystem. We will also continue deepening our sustainable business and social responsibility agenda focused on healthcare, education, economic empowerment, the environment, and reducing our carbon footprint,” group CEO Peter Ndegwa said.
The telco’s board at the same time recommended a final dividend of Ksh.0.62 per share.
“The Board of Directors have proposed a final dividend of KShs 0.62 per ordinary share amounting to KShs 24.84Bn to be approved at the Annual General Meeting (AGM). This will be in addition to the interim dividend of KShs. 0.58 per ordinary share that was already declared during the year,” said Khawaja.
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