Safaricom records Sh139.9 billion operating profit

M-Pesa remained a standout performer, contributing 42 per cent of Safaricom’s service revenue.

Safaricom PLC has reported a surge in profits, which excluding interest and tax expenses (EBIT), soared by 20.4 per cent to Sh139.9 billion according to its 2023/2024  financial results released Thursday.

The group EBIT also exceeded the company's forecast of Sh87 to 93 billion.

The results show a marked turnaround after the telco registered a negative performance of -16.0% in the last financial year.

"We have achieved a strong set of results in Kenya. This was a year characterised by tough economic headwinds including high inflation, rising energy costs and a weakening Kenyan shilling. The good news is that these macros started to ease off in the last quarter though their negative impact was felt most of FY 24," Safaricom CEO Peter Ndegwa said during the release of the results.

M-Pesa remained a standout performer, contributing 42 per cent of Safaricom’s service revenue, equivalent to Sh139.9 Billion, marking a growth of 19.4 per cent.

Consumer payments through M-Pesa accounted for 64.6 per cent of the total income.

The company's net income grew by 13.7 per cent year on year to Sh84.7 billion largely driven by the 11.7 per cent year-on-year growth in service revenue.

During the period under review, the telco assessed an overall net income adjustment of Sh7.4 billion as the Ethiopia hyperinflationary impact was incorporated into its consolidated numbers.

The Group's net income excluding minority interest, also grew by 1.2 per cent year-on-year to Sh63.0 billion, impacted by startup losses from Ethiopia.

"We are encouraged by the commercial progress in Ethiopia, which will start being a significant contributor of growth at the group level for the top and bottom line," Ndegwa said.

The overall Group service revenue grew double-digit by 13.4 per cent year-on-year to Sh335 billion while the Group's net income excluding minority interests recorded a growth of 1.2 per cent year-on-year.

The company also declared a total dividend of Sh1.20 per share.

“The board will recommend a final dividend of 65 cents per ordinary share bringing the total dividend payable for FY24 to Sh1.20 per share, equivalent to Sh48.08 billion,” Adil Khawaja, Safaricom Board Chairman said.