Mpesa drives growth as Safaricom hits record Sh99.7b profit

Safaricom has reported a record net profit of Sh99.7 billion for the financial year ending March, maintaining its top performance streak among firms listed on the bourse and status as region's most profitable company. 

The performance was a 67.3 per cent growth from the Sh69.8 billion reported in the previous year, with revenue for the period growing 11.1 per cent to hit 414.1 billion.  

The net profit reported on Thursday surpasses Sh75.5 billion earlier posted by Equity Group Holdings for the 2025 period, which is also a record profit for the bank. 

Safaricom Chief Financial Officer Dilip Pal said M-Pesa remained the key driver of revenue performance in the period, contributing 59.2 per cent of total revenue growth, expanding its revenue mix to 45.6 per cent and growing by 13.4 per cent year-on-year. 

“Financial service segment, which includes credit, wealth, and insurance, continues to scale, growing 19.1 per cent, the fastest growth we have seen in the last three years,” he said. 

Revenue from the connectivity business grew 6.9 per cent to Sh197.9 billion in the period, largely contributed by mobile data. 

The record profit also informed a record dividend of Sh2 per share with the total payout reaching Sh80.13 billion, a 67 per cent growth on the previous year.

An interim dividend of Sh0.85 per share has already been paid which brings the final dividend to Sh1.15. 

“This is a major milestone for Safaricom. Dividend payout has risen above levels recorded pre-Covid and also prior to our Ethiopia investment. Remember Ethiopia investment affected our dividend in the past few years," said Group Chief Executive Peter Ndegwa.

He said at group level, the telco delivered double digit growth across key metrics. He said while Kenya has delivered outstanding performance, Ethiopia made a valuable contribution making the performance one of their strongest yet.

"Safaricom Kenya achieved the Sh400 billion mark in service revenue, which is approximately $3 billion, representing 10 per cent YoY growth. This is our third year in a row delivering double digit growth," Ndegwa said. 

While M-Pesa remained a key driver of the performance, contributing Sh182.7 billion in revenue, the improvement of Ethiopia's business unit in the second half of the year played a critical role. 

The results show Safaricom Ethiopia narrowed its losses further in the second half to Sh7.8 billion compared to Sh13.4 billion in the first half. Losses for the year shrunk to Sh21.2 billion from Sh36.0 billion in the previous period. This is a 41.2 per cent growth. 

Revenue for the period hit Sh14.1 billion, a growth of 58.3 per cent. 

The much improvement in the second half is partly attributed to regulator approved pricing structures which intend to level the playing field for private telcos such as Safaricom as they compete with State owned Ethio Telecom. 

Ndegwa said Ethiopia is starting to become a material part of the larger business with meaningful contribution to revenue.

This improvement, following the pricing structures, is what has informed the company’s decision to halve its capital expenses in the 2027 period from the Sh18.7 billion spend in 2026 financial year. 

“Ethiopia capex will drop to between Sh6 and Sh9 billion which is half of what we invested in 2026 as we get closer to the infrastructure scale of 4,000 sites,” he said.

“The reduction in Ethiopia capex shows maturing business moving away from the high investment phase that we have been on over the past few years to normalised investment profile.” 

The Ethiopia business unit is approaching four years since its launch. 

Safaricom Chairman Adil Khawaja said steady and meaningful progress was being made in Ethiopia, especially following the pricing structure. 

“The pricing rationalisation implemented in December last year is already generating positive commercial momentum. With network coverage exceeding 50 per cent, Ethiopia is gradually transitioning from roll out to scale,” he said. 

He said the results for the group reflect a business that continues to demonstrate resilience, momentum and operational discipline. 

“We are beginning to see the benefits of scaling in Ethiopia with improving commercial momentum and narrowing losses. The balance of growth, investment and discipline is exactly what the board expects at this stage of our journey,” he added. 

Safaricom Ethiopia Chief Executive Wim Vanhelleputte said financial services is the next phase of growth for the business unit. 

“In the long term, M-Pesa is going to play a major role in the growth story of Ethiopia, especially because today the revenue contribution of M-Pesa is still very small,” he said.