News Desk
Safaricom Plc, in its financial results release, reported a 1.2% increase in net profits to $480.84 million (KES62.99 billion) for the full year ending March 2024, primarily driven by its M-Pesa mobile money platform.
M-Pesa continued its impressive performance, contributing 42% of Safaricom’s service revenue, amounting to Ksh 139.9 Billion, marking a growth of 19.4%. Consumer payments through M-Pesa constituted 64.6% of total income, with business payments following at 27.3%. The reintroduction of charges significantly boosted M-Pesa’s revenue, with total transactions reaching Ksh 40.2 Trillion in value and 28.3 billion in volume. M-Pesa revenues grew by 20% year-on-year, reaching $1 billion (KES140 billion) from $891.3 million (KES117.2 billion) in 2023, while mobile data revenues rose by 18% to $1.4 billion (KES189.8 billion). However, voice revenue experienced a decline of 0.6% to $608.4 million (KES80.5 billion).
M-Pesa’s profitability surged due to strong performance in B2B (39.8%) and P2P (15.4%) payments, along with increasing adoption of the firm’s global payments platform, which grew by 20% year-on-year.
The company’s operating profit increased by 20% to $1 billion (Sh140 billion), making it the first East African listed firm to surpass the billion-dollar milestone.
While Safaricom’s Kenyan unit profits jumped by 13.7% to $644.4 million (KES84.74 billion), costs associated with its entry into the Ethiopian market dragged the overall profits to $324.4 (KES42.66 billion). Despite challenges in Ethiopia, Safaricom remains optimistic about its prospects in the region, boasting 2806 network sites and 4.4 million active customers.
Excluding interest and tax expenses in Kenya, profits soared by 20.4% to Ksh 139.9 Billion, surpassing earlier guidance. Including its Ethiopia unit, Safaricom’s Earnings Before Interest and Taxation (EBIT) grew by 3.5% to Ksh 94.9 Billion.
Safaricom’s service revenue across the group witnessed a notable increase of 13.4%, reaching Ksh 335.4 Billion, with net income reaching Ksh 63 Billion, a growth of 1.2%.
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CEO Peter Ndegwa expressed satisfaction with the company’s performance, highlighting the commercial momentum in Ethiopia and the contribution of the Ethiopian team.
Safaricom sees Ethiopia as a key driver for regional growth amid a slowdown in the Kenyan market. Ndegwa aims for the Ethiopian venture to break even in 2025, emphasizing confidence in the regulatory environment.
The board will recommend a final dividend of 65 cents per ordinary share, totaling one shilling and twenty cents per share, equivalent to KES.48.08 billion.
Safaricom’s share price has underperformed the Nairobi Securities Exchange (NSE) 20 share and All Share Index (NASI) over the last three years, attributed to negative investor sentiment on frontier market equities. However, it has outperformed the benchmark indices Year to Date (YTD), driven by a bullish market run in Q1 2024, according to analysts at Nairobi-based Sterling Capital.
Techrectory with Agency Report.
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