Safaricom has reported a 22% decline in their net profit to Sh52.5 billion down from Sh67.5 billion during a similar period last year.
The drop in earnings was attributed to heavy capital investments in Ethiopia which raised the operating expenses by 34% to Ksh. 74 Billion. Group net income excluding minority interest declined by 10.6%. Voice service revenue declined by 2.6% to KES 81.1 billion
At the same time, Group Service Revenue increased by 5.2% to KES 295.7 billion, mobile data revenue grew by 11.4% to KES 54.0 billion, while M-PESA revenue grew by 8.8% to KES 117.2 billion
Safaricom Ethiopia has been issued a mobile money service license by the National Bank of Ethiopia which makes it the first foreign investor in the industry to get licensed. The license comes seven months after the commercial launch of GSM services.
The M-PESA license is expected to open the country to the world’s largest mobile payment system and Africa’s largest Fintech, and the world’s first mobile money transfer system.
M-PESA empowers over 30 million customers to transact, save or borrow money through their mobile phone. M-PESA catalysed financial inclusion in Kenya to 84% from a low of 26.7% in 2006 according to the 2021 FinAccess Survey and generated over KES 117.2 billion ($886 million) in revenue in FY23.
In the period under review, Safaricom Telecommunications Ethiopia added close to 3 million customers and built a distributor network of over 114 outlets, delivered an award-winning premium quality network in 22 cities and regions; with close to 1300 network sites and over 900 staff, 81% of whom are Ethiopians.
Peter Ndegwa, Safaricom PLC CEO said, “We have delivered a solid set of results despite the tough operating environment occasioned by slowdown in business activity in an election year in Kenya, tough macro environment as well as change in mobile termination rates which impacted our voice revenues significantly. The business is stable and regained a strong positive momentum in the second half of the year. Looking into the future, we passionately believe that our business is well-positioned to support our customers and provide technology
solutions as we transition into a purpose-led technology organization in line with our 5 YR strategy.”