Safaricom Plc, East Africa’s largest telecommunications company, has navigated a difficult macro-environment to post strong earnings for the full year ended March 2023, despite a decline in Group net profit. The company’s huge capital investments in Ethiopia have had a significant impact on its financial performance, resulting in a 22% decline in net profit to KES 52.48 billion from the previous year’s KES 67.49 billion.
However, Safaricom’s Kenyan operations have continued to perform well, with net income increasing by 3.0% to KES 74.5 billion.
Revenue from M-Pesa, Safaricom‘s flagship mobile money platform, grew by an impressive 8.8% to KES 117.2 billion, solidifying its position as the company’s top revenue generator, accounting for 39.7% of total service revenues. Moreover, revenue from mobile data surpassed the KES 50 billion mark for the first time, reaching KES 53.6 billion, a remarkable increase of 10.7%.
Safaricom’s success in growing its mobile money business is reflected in the impressive growth of total transaction value and volumes, which increased by 21.4% and 33.5%, respectively. The introduction of the M-Pesa Super App for customers and the M-Pesa Business App for businesses in 2021 further enhanced efficiency within the M-Pesa ecosystem. Additionally, the company’s merchant network, “Lipa Na M-Pesa,” witnessed a significant increase of 23.1% to 606.7 thousand merchants, with 70 thousand subscribing to Safaricom’s merchant credit line, providing further growth opportunities.
Safaricom’s capital expenditure (Capex) for the year increased by 93.1% to KES 96.1 billion due to the costs incurred in starting up operations in Ethiopia. The company’s total revenue increased by 4.3% to KES 310.9 billion.
Safaricom’s subsidiary, Safaricom Telecommunications Ethiopia, made history by becoming the first foreign investor to be granted a mobile money license in Ethiopia. This achievement further solidifies Safaricom’s position as a leading player in the region and sets the stage for the company to capitalize on the untapped opportunities in Ethiopia’s market.
Despite facing a tough regulatory environment with high inflation, currency depreciation, and tax increases, Safaricom has proposed a huge dividend payout of KES 48.08 billion for the year, compared to KES 55.69 billion paid in the previous year. The telecom company had already paid an interim dividend of KES 23.24 billion, with a proposed final payout of KES 24.84 billion in the last week of July.
Safaricom’s Ethiopian subsidiary recorded KES 562.4 million in service revenue, with total revenue at KES 1.8 billion. The company expects to roll out M-Pesa services in Ethiopia from Q2 2023, positioning it to emerge as a strong player in Ethiopia’s mobile telecommunications industry.
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