Safaricom maintains dividend as Ethiopia unit drags profit

Thursday May 09 2024

(L-R) CEO of Safaricom Telecommunications Ethiopia PLC Wim Vanhelleputte, CEO of Safaricom PLC Peter Ndegwa and Chief Finance Officer Dilip Pal during Safaricom’s 2023/2024 half year financial results announcement at Michael Joseph Centre - Safaricom headquarters in Nairobi, Kenya on November 9, 2023. PHOTO | NMG


Safaricom has maintained a Ksh1.20 per share dividend amounting to Ksh48.08 billion despite net profit for the financial year ended March 2024 falling 18.7 percent to Ksh42.66 billion.

The telco announced Thursday that its board has recommended a final dividend of Ksh0.65 per share amounting to Ksh26.04 billion to add to the Ksh0.55 per share interim dividend totalling Ksh22.04 billion declared in February.

The Ksh48.08 billion dividend is the same as that of the previous financial year when the telco paid Ksh0.58 per share interim dividend followed by a final payout of Ksh0.62 per share.

Safaricom said the final dividend will be paid on or about August 31, 2024, to the shareholders on the register of members as at the close of business on July 31, 2024.

Read: Safaricom stock jumps 6.8pc on Kenya unit profit growth

Net profits from Safaricom Kenya grew 13.7 percent to Ksh84.74 billion but a Ksh42.09 billion loss from Safaricom Ethiopia dragged the group’s net earnings to Ksh42.66 billion to mark the fourth consecutive year of a decline in the bottom line.


“We had an outstanding year in Kenya. We also outperformed group guidance, which was a revised guidance at the group level. We are also encouraged by our commercial progress in Ethiopia. Our Kenyan operation is now a one-billion-dollar business with operating profit hitting Ksh140 billion,” said Peter Ndegwa, chief executive at Safaricom.

“Net income, excluding minority interest, recorded a 1.2 percent growth. We expect from financial year 2025, Ethiopia will start being a significant growth contributor for the top line and an accelerator for the bottom line,” he added.

Total revenue grew 12.4 percent to Ksh349.45 billion mainly driven by M-Pesa and data business. M-Pesa revenue grew 19.5 percent to Ksh140 billion while data revenue rose 25 percent to 67.4 percent.

Voice revenue retreated by 0.6 percent to Ksh80.5 billion while messaging revenue went up 8.3 percent to Ksh12.3 billion.

The review period saw direct costs rise 5.2 percent to Ksh97 billion while other operating expenses rose 12.4 percent to Ksh83.3 billion.

Safaricom Chief Finance Officer Dilip Pal said Ethiopia operations are pointing to break even come 2025 and start contributing to the profitability.

Read: Safaricom boost as Ethiopia slashes termination charges

“We believe the worst is behind us from the group financial point of view. When you look at the group numbers, you have to look at Kenya and Ethiopia separately because Ethiopia is in an investment phase and with such large greenfield investments in the last two years, it is expected to have losses at the start,” said Mr Pal.