Safaricom net profit drops by 1.7pc to Kshs 67B

Safaricom’s net earnings excluding Ethiopia rebounded to pre-COVID 19 levels, to register a 1.4% growth year-on-year, to Ksh 69.6 billion.

However, net profit including Ethiopia dropped by 1.7% to Ksh 67.5 billion.

Safaricom CEO Peter Ndegwa attributed the net loss registered in Ethiopia to the market conditions but expects the firm’s interests in Ethiopia to break-even by year four of operation.

Mr Ndegwa said Safaricom Ethiopia plans to bring mobile financial services to Ethiopia. However, this is subject to the licensing and regulatory process by the Government of Ethiopia.

The growth in earnings was driven by MPESA revenue which jumped up 30%, mobile data revenue went up 8.1% while fixed enterprise was up 16.9%.

Mr Ndegwa said: “Our strong growth and achievements this financial year are due to the strong strategy execution, a dedicated staff force, and the business commitment to prioritize the needs of our customers. We will continue to be a sustainable purpose-led business as we transition to become a technology company by 2025.”

M-PESA revenue crossed the 100 billion shillings mark to hit kSh107.7 billion, up from kSh82.6 billion the previous year.

MPESA now accounts for 38.3% of Safaricom’s service revenue.

With the new businessstrategy and the renewed focus on the customer, Safaricom, in the new FinancialYear, plans to accelerate new growth areas, delivering superior customerexperience in order to be a purpose-led Technology Company by the end of 2025.

“The Board is encouraged by the recovery in the business from the pandemic in the past year. Two years into Safaricom’s new strategy, the Board continues to support the management in the business plans recording strong achievements in this financial year,” said Michael Joseph, Chairman, Safaricom Board of Directors.

Safaricom plans to launch an M-Pesa junior product targeting those aged below 18 who have access to mobile phones.

Safaricom board has recommended a final dividend payout of 75 cents per share which in addition to the 64 cents per share interim dividend brings to one shilling and thirty-four cents the total dividend payout to shareholders this year.