Safaricom annual earnings edge up helped by Kenya after Ethiopia hit
TLDR
- Safaricom's annual core earnings increased by 3.5% to 94.9 billion Kenyan shillings, driven by growth in the domestic market.
- Safaricom's Ethiopian business shows promising growth potential and is expected to contribute significantly to the group's overall performance next year.
- In Kenya, Safaricom saw a significant rise of 20.4% in earnings before interest and tax, exceeding the guided range.
Kenyan telecom giant Safaricom reported a 3.5% increase in its annual core earnings, reaching 94.9 billion Kenyan shillings ($724 million), with growth in its domestic market helping offset the costs associated with its nascent Ethiopian operations.
Partially owned by South Africa’s Vodacom and Britain’s Vodafone, Safaricom highlighted that its Ethiopian business is gaining traction and is poised to become a significant contributor to the group's growth starting next year. The launch of Safaricom Ethiopia in 2022 reflects the company's bet on the populous nation to drive expansion after several years of investment.
In Kenya, Safaricom achieved a notable 20.4% rise in earnings before interest and tax (EBIT), amounting to 139.9 billion shillings, surpassing the guided range of 129 to 132 billion. However, the overall performance of the group was tempered by the financial impact of the new Ethiopian venture.
Key Takeaways
The company projects group earnings before interest and tax (EBIT) in the range of 103 billion to 109 billion shillings for the current fiscal year ending in March 2025. Safaricom reported a 13.4% year-on-year increase in overall group service revenue, reaching 335 billion shillings. Within the group, the M-Pesa mobile financial services business grew by 8.8% to 117.2 billion shillings, while mobile data revenue saw a growth of 11.4% to 54 billion shillings. Safaricom has proposed a final dividend of 0.65 shillings per share to shareholders, maintaining the total dividend payout for the year at 1.20 shillings per share, consistent with the previous year.
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