Safaricom posts second profit fall to Sh67 billion

Safaricom CEO Peter Ndegwa. PHOTO | POOL

Safaricom has posted a 1.7 percent drop in net profit to Sh67.49 billion in the first results that include its Ethiopian operations.

The telco’s net profit for the full year ended March 2022 is the second drop in a row after it posted a 6.8 percent profit retreat last year to Sh68.67 billion, which was the first in nine years.

The performance came on the back of a 38.3 percent M-Pesa revenue jumped to Sh107.7 billion supported by the return to charging of transactions below Sh1,000 and improved business activity contributing to a 12.3 percent rise in service revenue to Sh281 billion.

During the review period, mobile data revenue grew by 8.1 percent to Sh44.64 billion while fixed service and wholesale transit increased by 18.3 percent to Sh11.24 billion.

While total revenue grew by 12.9 percent to Sh298.08 billion, helped by growth in M-Pesa, mobile data and fixed service, increased costs piled pressure on the bottom-line.

Operating expenses increased by 19.9 percent to Sh55.18 billion from Sh46 billion a year earlier, while direct costs rose by 14.3 percent or Sh11.5 billion to Sh91.47 billion.

“This is also the year we established our first cross-border investment in Ethiopia and are on course for a commercial launch within 2022,” said Safaricom chief executive officer Peter Ndegwa on Thursday. Safaricom owns a 55.7 percent stake in the Ethiopian business.

Safaricom board has recommended a final dividend of Sh0.75 per share amounting to Sh30.04 billion, bringing the total payout for the year to Sh56 billion.

The telco had paid an interim dividend of Sh0.64 per ordinary share amounting to Sh25.64 billion.

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Note: The results are not exact but very close to the actual.