Safaricom’s profit drops for second year in a row

Telecommunications firm Safaricom has announced that its net profit for a full year has dropped for the second time. This is after the company posted a 1.7 percent drop in net profit to Sh. 67.49 billion.

These were the company’s first financial results to include its Ethiopian operations.

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In the previous year, Safaricom’s profit had dipped by 6.8 per cent. This was the first in nine years.

If the company had excluded its Ethiopia operations, it would have posted a 12.2 per cent net profit growth to Sh. 77 billion.

The firm’s M-Pesa revenue jumped by 38.3 per cent to Sh. 107.7 billion. This jump was supported by the return to charging of transactions below Sh. 1,000 and improved business activity contributing to a 12.3  percent jump in service revenue to Sh. 281 billion.

M-Pesa handled transactions worth Sh. 29.5 trillion during the year and contributed 38.3 per cent of the telco’s service revenue.

“We are proud of our strong performance that reflects our focus on solving customer issues and societal challenges,” said Safaricom chief executive officer Peter Ndegwa.

Safaricom also confirmed that it will be launching its operations in Ethiopia this year with an investment of between USD 1.5 and 2 billion over five years. According to Safaricom’s chief financial officer Dilip Pal.

Following these results, Safaricom announced that it will pay out a final dividend of Sh. 0.75 per share amounting to Sh. 30.04 billion. This will bring the total payout for the financial year to Sh. 56 billion.

Safaricom had paid an interim dividend of Sh. 0.64 per ordinary share amounting to Sh. 25.64 billion.