- Despite hefty investment in Ethiopia that weighed on the telco’s profits, the company would pay shareholders Sh55.6 billion in dividends, up from Sh54.8 billion previously.
- The telco’s net profit for the fiscal year ending March 2022 is down for the second year in succession, following a 6.8 percent profit loss last year, the first in nine years.
Safaricom has held its profit payout regardless of a 1.7 percent drop in net benefits of Sh67.4 billion for the year finishing March 2022 on the Ethiopian section.
The telco will deliver investors Sh55.6 billion in profits up from Sh54.8 billion to keep up with the profit strategy regardless of the high interest in Ethiopia burdening the telco’s productivity.
The telecommunications company’s net profit for the fiscal year ended March 2022 is down for the second time, following a 6.8 percent profit decline to Sh68.67 billion last year, the first in nine years.
The result was a result of a 38.3 percent increase in M-Pesa revenue to Sh107.7 billion, which came from the return of charged transactions under Sh1,000. The reemergence of commercial activity has contributed to a 12.3 percent increase in service revenue to Sh281 billion.
Mobile data income increased by 8.1 percent to Sh44.64 billion during the review period, while fixed service and wholesale transit revenue jumped by 18.3 percent to Sh11.24 billion.
The total revenue increased by 12.9 percent to Sh298.08 billion, thanks to growth in M-Pesa, mobile data, and fixed service, while the rising expenditures weighed on the bottom line.
Operating expenses jumped by 19.9 percent to Sh55.18 billion from Sh46 billion the previous year, while direct costs increased by 14.3 percent to Sh91.47 billion. “This is also the year we established our first cross-border venture in Ethiopia. We are on track for a commercial debut in 2022,” Safaricom CEO Peter Ndegwa said. Safaricom controls 55.7 percent of the Ethiopian company.
Safaricom’s board of directors has recommended a final dividend of Sh0.75 per share, amounting to Sh30.04 billion, increasing the year’s total distribution to Sh56 billion.
The telco paid an interim dividend of Sh0.64 per ordinary share for a total of Sh25.64 billion.
Safaricom’s CEO, Peter Ndegwa, credited the total deficit enrolled in Ethiopia to the economic situation. However, he anticipates that the company’s advantages in Ethiopia should make back the initial investment by year four of activity. This move will be dependent upon the authorizing and administrative cycle by the Government of Ethiopia.
Mr. Ndegwa said: “major areas of strength for us and accomplishments this fiscal year arose from the solid methodology execution, a committed staff force, and the business obligation to focus on the necessities of our clients. We will continue being a reason-driven business as we turn into an innovation organization by 2025.”
Safaricom is now looking for licenses for money market products, insurance, mergers, and acquisitions to find new markets in Africa.