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By Victor MUJIDU
Telecommunications company Safaricom Thursday announced a Sh15 billion drop in its profits for the Financial Year ending March 31, 2023, representing a 22.3 per cent decline.
The company’s net profit for the year under review was Sh52.5 billion, down from Sh67.5 billion the previous year, a third drop in a row which the telco attributed to higher costs associated with the tough business environment and its entry into Ethiopia.
The performance results were released Thursday morning even as the banking regulator National Bank of Ethiopia, announced granting the telco a licence to roll out M-Pesa mobile money services in the country. The licence cost Safaricom $150 million (Sh20.5 billion at the current exchange rates).
This year, we all experienced tough headwinds, including high inflation, a depreciating shilling, severe drought, and failed rain seasons among others. Despite the challenges faced earlier in the year, we were able to benefit from a smooth political transition following the general elections. This stability, along with our strong commercial execution, led to improved performance in the second half of the year,” said Safaricom’s CEO Peter Ndegwa during the results release.
In October last year, Safaricom launched commercial operations for Safaricom Telecommunications Ethiopia PLC (STE) as a subsidiary of Safaricom PLC, with population coverage of 24 per cent and 1,272 sites covering 22 large and medium-sized cities, after the phased city-by-city customer network pilots.
The unit posted a net loss of Sh21.7 billion.
The Kenyan unit posted Sh74.5 billion profit buoyed by strong growth in mobile data and mobile money.