Safaricom eyes Sh110bn full year profit as Fuliza reigns supreme

Safaricom eyes Sh110bn full year profit as Fuliza reigns supreme

Safaricom Chief Executive Officer, Peter Ndegwa at a past event. Safaricom is banking on the increased uptake of its loan facilities led by Fuliza to break the Sh110 billion gross profit ceiling in 2022.

Releasing the telco’s financial results for the first six months of the year yesterday, chief executive Peter Ndegwa hailed the overdraft facility introduced in 2019 for propping up M-Pesa’s earnings that accounts for 38 per cent of the firm’s total revenue.

M-Pesa’s overall transactions grew 51.5 per cent to Sh13.71 trillion while the total volume of transactions grew 42 per cent to Sh7.27 billion.

"In the first six months of the year, the value of Fuliza disbursements grew by 62.4 per cent to Sh242.6 billion compared to Sh149.4 billion same period last year,” Ndegwa said.

This means, at least Sh40 billion is borrowed via Fuliza every month, translating to Sh1.34 billion per day.

Fuliza continued to be Safaricom’s cash cow, being the only digital financial service by the telco that recorded a growth in revenue in the first half of the year.

The overdraft facility recorded a 32.2 per cent growth in revenue to Sh 2.8 billion from Sh2.1 billion in the first half of 2021.

Other credit products of the listed mobile telephone provider recorded a drop, with KCB M-Pesa and M-Shwari both recording significant declines in revenue as more Kenyans opted for the overdraft facility.

Yesterday, the telco reported a 12.1 per cent growth in net earnings in the first six months of the year to hit Sh37.1 billion compared to Sh33 billion same period last year.

Safaricom Plc aims at becoming the first company in East Africa to hit more than Sh110 billion in earnings this financial year.

"We are targeting Earnings Before Interest and Taxes (EBIT) of between Sh107 to Sh110 excluding Ethiopian operations. If included, we are looking at Sh97 billion to Sh100 billion,’’ Ndegwa said.The firm has projected a high capital expenditure cost for Ethiopian operations, which are still shaky following ongoing political instability in the landlocked country.Safaricom has projected capital expenditure of Sh70 billion to Sh73 billion in the financial year on Ethiopian investment and Sh40 billion to Sh43 billion if it holds plans to enter the country.Late last month, US government agency, Development Finance Corporation (DFC) which had pledged $500 million (Sh54 billion) in Safaricom’s Ethiopia operations said it weighing the escalation of armed conflict before it could release the loan.In July, the Safaricom-led consortium received a […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply