In November 2024, Elias Wambua invested Sh1.5 million in Safaricom shares. He acquired about 104,000 shares that were valued at a price of Sh14.35 each. “I took position about two weeks after Safaricom released their half year financial results for the six months of 2024. After looking at the results, I could foresee gains in the coming months and I wanted to take a strategic position from onset,” says Wambua.
In the financial results, Safaricom booked a net profit of Sh28.1 billion for the six months of the financial year. This profit was driven by a growth in M-Pesa revenues which increased to Sh77.2 billion from Sh73.7 billion. At the same time, service revenues went up 12.9 percent to Sh177.5 billion while connectivity revenues – which include voice, mobile data and fixed data – increased from Sh90.8 billion to Sh91.3 billion.
“On an underlying basis, our business is fantastic with the show of real, strong momentum in Kenya. Most importantly we are proud of the value we have been able to offer to our customers, ”Safaricom chief executive officer Peter Ndegwa had said.
“We will continue simplifying our customer journeys and will intensify our focus on new growth areas to continue our momentum in the second half of the year.”
It was this prospect of growth in the second half of the year that also pushed Sofia Mwakale to invest in the Safaricom stock. Sofia, who is 36, invested Sh600,000 in the counter at a price of Sh14.20 apiece and received about 42,250 shares.
Seven months later, Wambua and Mwakale are among investors who can now afford to smile all the way to the bank following a bullish run by the Safaricom counter at the Nairobi Securities Exchange.
On June 12, Wambua cashed in his investment at Sh24.90 per share, after booking a gain of Sh1.08 million that pushed his portfolio to Sh2.58 million .
“I gained about Sh1.08 million from my initial investment of Sh1.5 million,” he says. “I am now looking to take another position in the same counter.” On the other hand, Mwakale cashed in her investment after an appreciation by over Sh400,000. Like Wambua, she is also preparing to make another bid for the counter.
READ MORE: The men and women steering Safaricom’s multi-billion growth
When we asked the two investors why they have so much faith on the counter that they are willing to re-invest again, they cited the company’s management and financial track record as pointers of a fundamentally stable and ambitious company.
“I have been tracking Safaricom over the past five years, particularly after the current chief executive took over. It was the first time that a Kenyan was taking over as chief executive and I was keen to see what direction the company would take,” he says, referencing on Mr. Ndegwa, who became Safaricom CEO in April 2020.
According to the latest financials by the company, Safaricom is now the largest company in East and Central Africa by market capitalization and profitability, a feat that has been achieved within just five years since Mr. Ndegwa took over.
For instance, in the financial year ending March 31, 2025, the telco made history as the first company in the East African region to cross the Sh387.7 billion ($3 billion) mark in annual revenue. In the same year, Safaricom also posted a 10.8 percent growth in net profit to Sh69.8 billion.
According to Washington Odhiambo, a financial analyst and the founder of financial consultancy firm Bizways Financial Solutions, this growth is set to manifest even further as the company’s forays into the new Ethiopian market opens up.
“Safaricom’s entry into Ethiopia was the boldest market venture the company has undertaken since its inception, and fundamentals show that there will be good returns on investment as this is a high-return market,” says Odhiambo.
Having joined Safaricom in the economically difficult 2020 pandemic year, Ndegwa is credited with leading Safaricom’s entry into Ethiopia following the successful acquisition of the $850 million operating license in April 2021.
“Safaricom has started well in the Ethiopian market. As the company establishes itself and grows its client base, the return on investment shall be quite significant. We expect to see the Ethiopian market emerge as a major contributor to the company’s overall revenues within the next two years or so,” he says.
This is evident in the growth the company has recorded since it ventured into the Ethiopian market. For instance, in the month of October 2022 when Safaricom officially launched its services in Ethiopia, the telco attracted 740,000 subscribers.
This saw the firm generate revenues of up to Sh. 98.3 million in that month alone. Less than two months later, in mid-November, Safaricom crossed the one million subscribers milestone.
In the twelve months to December 2024, Safaricom Ethiopia’s M-Pesa customers increased from 3.1 million to 10.8 million. “We registered 10.8 million M-Pesa customers as of end of December 2024, cumulative since inception. We are continuously assessing suitable use cases to drive higher usage,” said Safaricom.
M-Pesa services were launched in Ethiopia in August 2023, about 10 months after the company launched services in the country. The company increased the number of its M-Pesa merchants in Ethiopia from 43,100 in 2023 to 119,500 in 2024.
“The numbers show that Ethiopian subsidiary recorded Sh6.74 billion in revenue. This was an increase of 40 percent from the Sh4.82 billion revenue that was recorded in the nine months to December 2023,” says Odhiambo.
“The number of 90-day active customers on its books increased by 64 percent to 7.1 million. The average revenue per user increased by 13 percent to Sh129.06 as at December 2024 from Sh113.89 as at December 2023.”
Interestingly, over the past five years, Safaricom has evolved from just providing services, to giving Kenyans investment opportunities beyond share acquisitions. For instance, in December 2024, Safaricom debuted a new money market fund dubbed Ziidi. The fund allowed Kenyans to start investing and earning daily interest in the money market fund from as little as Sh100. Within a month, the fund pooled Sh2.85 billion.
“We are making an invitation to every Kenyan irrespective of their financial standing, to take the first step towards wealth creation,” said Mr. Ndegwa.
This investment product allows customers to make free deposits into Ziidi MMF accounts and withdrawals into their M-Pesa wallets, offering the same flexibility as has been the case with moving money between M-Pesa and M-Shwari accounts.
“For two decades, Safaricom has combined the power of technology and our innovative spirit to solve customer and societal challenges. Led by our purpose to transform lives, we have deepened digital and financial inclusion by connecting people to people, people to opportunities, and people to information,” says Ndegwa.
“We will continue to develop new digital products and services that solve societal challenges in agriculture, education, health, and essential services. Leveraging the power of partnerships and our digital platforms, we will drive affordability and innovation in mobile communication, financial services and enterprise solutions.”
