Safaricom Financial Statement For 2024/2025 Full Year - CFO Report

Safaricom Kenya Customer Growth

I'll start with Kenya performance, and I'll begin with customers. The customer base grew significantly across all segments of our business. The overall 30-day active customers grew by 7.1% to 37.1 million—the highest year-over-year growth in four years.

One-month active M-PESA customers grew incrementally by 3.4 million in one year, a double-digit growth of 10.5%. This was also the highest year-over-year growth we've seen in the last four years.

Connectivity customers also grew by 7.1%, again the highest in the last four years. And the last segment, fixed data, grew by a strong 20.5%. We've sustained double-digit growth in fixed data every year since 2019.

Service Revenue

Now moving into revenue. I’ll start with service revenue. This slide is quite familiar to you. We are starting with double-digit growth, and this is on the back of double-digit growth seen in the prior year. It is the first time we’ve recorded consecutive double-digit year-over-year growth in service revenue since 2018.

Customer growth, which I just spoke about, drove 5% of the service revenue growth, while ARPU contributed 4.8%, signifying that the health of the growth is strong—driven by both customer additions and ARPU.

You’ll notice that the contribution is shifting more towards M-PESA. M-PESA now contributes 44.2% of the revenue, but we’ve seen growth across all segments. Fixed revenue grew by 12.9%, connectivity revenue registered high single-digit growth at 6.5%, and M-PESA grew by 15.2%, contributing 61% of the incremental revenue growth for the business.

All three areas have grown in line with our medium-term outlook, which we shared earlier in the year at the investor forum.

M-PESA Performance

M-PESA recently celebrated its 18th anniversary and delivered another year of stellar top-line growth. The revenue profile has evolved significantly. Five years ago, withdrawal revenue contributed 38%—now it's down to 23%.

Business payments grew by 27.4% and were the biggest contributor to year-over-year growth for the second year in a row, contributing half of M-PESA revenue growth. Financial services revenue—our new area of growth, including credit, wealth, and insurance—grew 5.2% year-over-year.

Total volume and value of M-PESA transactions grew by 29.5% and 1.6% year-on-year, reaching 37.2 billion transactions and KES 38.3 trillion respectively. Chargeable transactions per one-month active customer grew 20.3%, closing at 37.9. The M-PESA take rate remained stable at 0.62.

Key Growth Areas in M-PESA

We’ve seen accelerated growth in key areas as we continue to innovate in payments. Merchant payments for both formal and informal segments—Lipa na M-PESA and Pochi la Biashara—showed strong progress. The combined merchant base closed at 1.8 million, representing 44.2% year-over-year growth.

Merchant payments were significantly driven by Pochi la Biashara. The number of Pochi merchants doubled to 1.1 million. Revenue from this segment tripled to KES 2.2 billion. Overall merchant ecosystem revenue increased by 20.5% year-over-year.

In our new growth areas, Wealth Management products held KES 9.6 billion in assets under management with 631,000 active customers. We also launched insurance products during the year. Despite being operational for only a few months, we issued 411,000 policies with a sum assured of KES 3.3 billion. The opportunity here is immense.

M-PESA Credit Services

The credit portfolio is on a recovery path, growing 5.1% year-over-year, with H2 growth momentum at 9.3%. Growth had slowed over the past two years due to Fuliza repricing. The higher volumes didn’t offset the price decline, but Fuliza is now back to growth in both customer base and revenue in FY25.

Fuliza revenue makes up 48% of credit revenue growth and rose 5.6% compared to last year. We also enhanced credit limits in response to customer needs, which drove higher utilization. Volume increased by 24.2% year-over-year to 4.1 billion, and value reached KES 1.1 trillion. We’ve rolled out merchant lending products as well, and early signs are promising.

Super Apps Growth

Our Super Apps—both consumer and business—are playing a vital role in facilitating digital transitions for both lifestyles and business transactions. Consumer app users grew by 30%, while active business app merchants doubled to 301,000.

The value transacted on the consumer app grew by 16.1% to KES 2.3 trillion, while the business app recorded KES 0.9 trillion—an impressive 77.3% year-over-year growth. Together, both apps now contribute 8.4% of total M-PESA revenue.

Connectivity Business Performance

This segment, which includes voice, mobile data, messaging, incoming traffic, and content, grew 6.5% year-over-year, accounting for 34% of incremental service revenue growth. All lines recorded growth except incoming revenue, which declined due to a reduction in MTR.

Voice and messaging revenue grew by 1.6%, which is strong given structural pressures. Mobile data grew impressively at 15.2%, accounting for 82% of connectivity revenue growth. Digital content—a key focus area—grew by 53.3% year-over-year.

Mobile Data Strategy

We are on a mission to get 4G+ devices into the hands of our customers. The number of 4G+ devices reached 23.4 million—a 33.3% year-over-year growth—including over 1 million 5G devices.

Through our device financing initiative, Lipa Mdogo Mdogo, we’ve sold around 2 million devices to date—700,000 of them in the last financial year. Average monthly data usage per customer rose 13.9% to 4.2 GB. Mobile data now accounts for 20% of service revenue and contributed 27.9% of service revenue growth.

Fixed Revenue Performance

Fixed revenue recorded 12.9% year-over-year growth, up from 12.2% last year, reaching KES 17.1 billion. This was driven by solid customer growth across all segments. Home segment now contributes 44.3% of fixed service revenue, growing 16.6%, while the enterprise segment grew 13.4%.

Active home customers increased 21.3%, crossing 300,000. Enterprise fixed customers grew 17.5% to reach 70,000, underscoring our commitment to expanding fixed service offerings and technology adoption.

Operating and Direct Costs

Cost-to-sales ratios remained stable. Operating cost-to-sales ratio stands at 17.9%, with a healthy contribution margin of 71.8%. Operating costs increased by 14.4% to KES 68.1 billion, driven mainly by network expansion and payroll adjustments.

Our 5G footprint grew from 800 to over 1,700 sites—more than doubling in a year. Direct costs grew by 7.2%, slower than revenue. Excluding handset costs, direct cost grew only 3% year-over-year. We’re continuously exploring efficiencies through sustainable initiatives.

Debt and Free Cash Flow

We recorded an impressive 18.2% year-over-year growth in free cash flow. Debt increased by 5.4% to KES 80 billion, with net debt at KES 64.5 billion, partly due to a KES 15 billion sustainability-linked loan. Finance costs grew 12.5% due to rising interest rates, but our net debt-to-EBITDA ratio remains healthy at 0.31.

Kenya Summary

To wrap up Kenya’s performance: the company has shown remarkable resilience as we move into our next five-year strategy phase. We delivered double-digit growth across all financial metrics, including 10.5% growth in service revenue, 13% EBIT growth, and a 15.8% increase in operating free cash flow, reaching KES 148.9 billion.

Performance in Ethiopia

In the February investor forum, we mentioned that Safaricom Ethiopia is making confident strides—signs of maturity after three and a half years of commercial operations. Ethiopia contributed 9% to our group service revenue growth, which is commendable considering the challenging macroeconomic environment.

90-day active customers doubled. Voice customers reached 7.8 million, data customers grew 2.5 times to 7.1 million, and M-PESA customers doubled to 2.4 million. Total 90-day active customers now stand at 8.8 million, in line with our FY25 guidance of 7–10 million GSM users.

Ethiopia Revenue and ARPU

Voice usage rose 80% year-over-year to 127.3 minutes per customer per month. Data usage grew steadily to 6.5 GB per chargeable customer. ARPU also saw strong growth—mobile data ARPU doubled, and voice ARPU rose 50%.

Service revenue in local currency more than tripled to 6.9 billion birr. Mobile data makes up 75.4% of that, while voice revenue grew 40.9%. M-PESA is also gaining traction; 18% of airtime is now purchased via M-PESA.

Ethiopia Funding and Capex

Total funding from the consortium stood at $2.27 billion by March 2025, with $410 million added this year. Safaricom PLC contributed $1.037 billion. Capex over the past four years totals $1.2 billion, within the projected $1.3 billion cap for the five-year investment period.

Ethiopia Financial Performance

Despite the bar devaluation due to currency reforms, underlying financial performance improved year over year. EBITDA loss reduced from KES 21.4 billion to KES 8.8 billion (excluding depreciation). We've mitigated currency impacts by renegotiating contracts, onboarding local vendors, and reducing expatriate staff. Industry-wide price increases are also expected to support sustainability.

Group Performance and Outlook

Group capex stood at KES 91.3 billion, with Ethiopia accounting for 43%. Kenya’s capex intensity remains at a stable 13.7%.

Group-wide, we've had an outstanding year—strong double-digit growth in service revenue, EBIT, and net income excluding minority interest. H1 saw a 17.7% decline in net income, but H2 rebounded with 44.4% growth, resulting in a full-year group net income growth of 10.8%.

You can download pdf of full finacial report from Safariom Annual Reports