Safaricom Plc has released its financial results for the full fiscal year of 2024, reporting robust earnings propelled largely by its M-Pesa mobile money platform.
- •Despite the losses faced in its Ethiopian venture, the telecommunications giant reported a significant surge in profits, which excluding interest and tax expenses in Kenya, soared by 20.4% to Ksh 139.9 Billion, surpassing earlier guidance of Ksh 129 Billion to Ksh 132 Billion.
- •Including 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 saw a notable increase of 13.4%, reaching Ksh 335.4 Billion, with net income hitting Ksh 63 Billion, a growth of 1.2%.
Safaricom Kenya
In its Kenyan operations, Safaricom witnessed a remarkable 11.7% growth in service revenue, totaling Ksh 329.8 Billion. EBIT surged by 20.4% to Ksh 139.9 Billion, while EBITDA increased by 16.6% to Ksh 187 Billion. Net income for the Kenya business rose by 13.7% to Ksh 84.7 Billion, with operating cash flow climbing by 11.2% to Ksh 128.6 Billion.
M-Pesa continued to be a standout performer, contributing 42% of Safaricom’s service revenue, equivalent to Ksh 139.9 Billion, marking a growth of 19.4%. Consumer payments through M-Pesa accounted for 64.6% of total income, while business payments followed at 27.3%. The return to charging significantly boosted M-Pesa’s revenue, with total transactions reaching Ksh 40.2 Trillion in value and 28.3 billion in volume.
Safaricom Ethiopia
Despite challenges in its Ethiopian venture, Safaricom remains optimistic about its prospects in the region where the telco now has 2806 network sites, with 90 Day active customers hitting 4.4 Million customers.
“We have doubled our active customer base to 4.4M, we have built a world class network that is currently almost half the Kenya’s size and are on track to meet our licence obligations. We are hence pleased with commercial momentum in Ethiopia and proud that we have been able to deliver this momentum with a Safaricom Ethiopia team that is 90% Ethiopians.” said Safaricom CEO Peter Ndegwa.
Dividends
“As a result of this growth, the board will recommend a final dividend of 65 cents per ordinary share bringing the total dividend payable for FY24 to one shilling and twenty cents per share, equivalent to KES.48.08 billion.” Adil Khawaja, Safaricom Board Chairman.
SCOM’s share price has by far underperformed both the Nairobi Securities Exchange (NSE) 20 share and All Share Index (NASI) over the last three years.
According to analysts at Nairobi based Sterling Capital, the poor performance of the share price has been attributable to negative investor sentiment on the investment prospects of frontier market equities in light of high global and local interest rates. Safaricom has however outperformed the benchmark indices Year to Date (YTD) riding from a bullish market run in Q1 2024, they said in a note before release of the earnings results.
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