Business

Safaricom’s Full Year 2022 Profit Falls 1.7% on Ethiopia Investment, Declares Ksh 30 Billion Dividends

Kenya’s largest listed company Safaricom PLC on Thursday reported its full-year earnings for the period ended 31st March 2022. For the first time, Safaricom reported its earnings as a group including the Ethiopia business which will launch commercial operations in the course of 2022.

The group’s total income grew slightly by 1.4% to Ksh 69.65 Billion while profit after tax fell by 1.7% to Ksh 67.496 billion, the second decline in a row from the 6.8 per cent profit drop that was recorded last year, the first in nine years.

The group service revenue grew by 12.3% to Ksh 281 Billion mainly driven by Mpesa revenues, mobile data and fixed revenue.

Mpesa revenues grew 30.3% year on year to Ksh 107.7 Billion on the back of a 34% growth in total value of transactions to a record Ksh 29.5 Trillion. Mpesa now contributes over 38% of the Telco’s service revenue, up from 33% in full year 2021. Personal payments accounted for about 67.3% in the Mpesa revenues, business payments at 21.6%, global payments 2.3% while financial services such as lending (Fuliza) contributed 8.7%.

Total monthly active users grew by 4.3% to 32.8 Million as the telco blamed the slow growth of users in the ongoing implementaion of subscriber registration details.

Mobile data revenue grew 8.1% to sh 48.44 billion driven by increased usage evidenced by a 26.5% YoY increase in the number of customers using more than 1 gigabyte of data.

Total Capital expenditure (Capex) for the year went up by 42.4% to Ksh 49.8 Billion mainly as a result of investments into the Ethiopian unit which is yet to launch. Excluding Ethiopia, Safaricom Kenya’s Capex was up 12.5% to Ksh 39 Billion.

Borrowings

“As at 31 March 2022, borrowings were KShs 65.31Bn while cash and cash equivalents stood at KShs 30.78Bn leaving a net debt position of KShs 34.53Bn. To support the payment of license fees for the telecommunications license awarded to the Safaricom-led consortium by the Government of Ethiopia in 2021, we undertook a one-year bridge facility of USD 400Mn to finance this venture. During the year, the bridge facility was converted into a 5-year long term facility of USD 120Mn, and a KShs 31.1Bn (USD 280Mn KShs equivalent) 7- year facility with 2 years moratorium on principal repayment. The new facility was done through a syndication process where both local and international banks participated in.” Safaricom Plc noted in a statement to investors.

Despite the decline in net profit, Safaricom’s board has proposed a dividend of KSh 0.75 per ordinary Share amounting to a total of KSh 30.04 Billion subject to shareholder approval at the company’s upcoming AGM on 29 July 2022. The telco in the course of the year declared an interim dividend of KSh 0.64 per Ordinary share amounting to KShs 25.64 Billion. If approved, this brings the total dividend for the year to 55.69 Billion.

Speaking during the presentation of the results, Safaricom’s CEO Peter Ndegwa said they are proud of our strong performance that reflects our focus on solving customer issues and societal challenges.

READ; Citi Retains Neutral Rating on Safaricom Stock, Concerns on Ethiopia Investment, Competition and Regulatory Risks


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