Revealed: The billions of shillings Safaricom shareholders have received since 2008

By Fred Aminga On Fri, 23 Aug, 2019 13:09 | 2 mins read
Safaricom shareholders have pocketed Sh301 billion since the firm went public in 2008. [PHOTO | FILE]
Safaricom shareholders have pocketed Sh301 billion since the firm went public in 2008. [PHOTO | FILE]
Editor's Review
  • Safaricom shareholders have pocketed Sh301 billion since the firm went public in 2008 on the back of the firm’s record of paying progressive dividends each year. 
  • For instance, during the 2018/19 financial year, the firm proposed a dividend of Sh50.1 billion, an increase of 13.6 per cent year-on-year.
  • But due to the strong balance sheet position, a special dividend of Sh24.8 billion was declared, bringing the total payout to Sh74.9 billion for the full year ended March 2019.
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Safaricom shareholders have pocketed Sh301 billion since the firm went public in 2008 on the back of the firm’s record of paying progressive dividends each year. 

For instance, according to the firm’s 2019 Sustainable Business Report launched on Wednesday, during the 2018/19 financial year, the firm proposed a dividend of Sh50.1 billion, an increase of 13.6 per cent year-on-year.

But due to the strong balance sheet position, a special dividend of Sh24.8 billion was declared, bringing the total payout to Sh74.9 billion for the full year ended March 2019.

Speaking on Thursday, August 22, during the launch of the report, Safaricom Chairman Nicholas Ng’ang’a said the telco supports 978,633 jobs directly and indirectly, and its true value or estimated value a buyer would be willing to pay for the company now stands at Sh600 billion. 

Ng’ang’a said the Nairobi Securities Exchange listed firm contributes about 6.3 per cent to the gross domestic product (GDP). Cumulatively, this is what agriculture, forestry and fishing sector contributed to the GDP last year according to Kenya National Bureau of Statistics.

-Business model-

“As the nature of our business has evolved over the last 18 years, so has the way we approach business,” said Ng’ang’a.

The report seeks to illustrate how Safaricom is using a sustainable business model to address society’s needs, and goes beyond the company’s financial performance to give a more intimate and accurate description of its business.

According to the report, the company’s  contribution to the economy rose to Sh601 billion  or 9.6 times of the Sh62.5 billion  net profit earned in the 2018/19 financial year.

Responding to proposals in the Kenya Information and Communications (Amendment) Bill 2019 which proposes for a new regulatory framework for telcos, Ng’ang’a said attempts to split M-Pesa from Safaricom is not a sustainable proposition since it is a key cog of the firm’s value chain.

“M-Pesa is a key business growth area for Safaricom and it is getting to a place where it is the leading activity for the company.One has to study our strategy. We are not just a money transfer company,” he said.

Leveraging on M-Pesa to create new products such as Fuliza, analysts project the overdraft facility could give Safaricom one of the biggest loan books in the country, with borrowings through the mobile app set to hit Sh200 billion this year .

The firm is projecting better tidings ahead going by 2020 financial outlook. The report forecasts earnings before tax moving from Sh89 billion to between Sh93 billion and Sh97 billion, with capital expenditure remaining within the Sh36 billion to Sh38 billion range.

Chief Corporate Affairs Officer Steve Chege said the firm will plant five million indigenous trees in the next five years to enable the country to increase forest cover from the current 7.2 per cent.

“Our business continues to contribute towards improving the quality of life for Kenyans across the country,” he said.