Powerful Safaricom Dividend Surge as Earnings Hit Sh99.7 Billion

Safaricom PLC is one of the few East African companies with such economic clout. The telecommunications giant has in recent years evolved from a traditional mobile network operator to a digital finance giant that touches nearly every part of Kenyan economic life. From mobile money payments and internet connectivity to enterprise solutions and regional expansion, Safaricom has become one of the most profitable and strategically important companies in Africa.

That dominance was once again reinforced after the company announced a remarkable 67 percent increase in dividends following a sharp rise in annual earnings to Sh99.7 billion for the financial year ended March 2026. The announcement immediately captured investor attention because it marked one of the strongest recoveries in Safaricom’s recent history after years of pressure from heavy spending on its Ethiopia expansion project.

The results not only exceeded analyst expectations but also signaled that Safaricom’s long-term investment strategy may finally be paying off. The company proposed a total dividend payout of Sh2 per share, equivalent to approximately Sh80 billion in shareholder payouts, representing a 66.7% jump compared to the previous year.

For investors, the results represented more than just improved profitability. They reflected renewed confidence in the company’s future, reduced pressure from Ethiopia-related losses, and continued expansion of high-margin businesses such as M-Pesa and mobile data services. For Kenya’s economy, the strong performance reinforced Safaricom’s status as a key driver of economic activity, tax revenue, digital transformation, and capital market stability.

Safaricom Earnings Growth Signals a Strong Recovery

The most striking aspect of the results was the scale of the profit increase. Safaricom reported a 67.3 percent jump in net profit to Sh99.7 billion, up from approximately Sh59.6 billion in the previous financial year.

This level of growth is significant because it came during a period when many companies across Africa continue to face inflationary pressures, weakening consumer purchasing power, currency volatility, and rising operational costs. Yet Safaricom managed to grow revenue, improve profitability, and substantially increase shareholder payouts simultaneously.

Several factors contributed to the strong earnings performance. The first was continued growth in Kenya’s core business operations, especially in M-Pesa and mobile data services. The second was the sharp reduction in losses from Ethiopia, which had previously weighed heavily on group earnings. The third was improved operational efficiency and increasing digital adoption among customers.

Safaricom’s total service revenue rose to over Sh414 billion during the financial year, reflecting strong demand for internet services, mobile financial solutions, and enterprise connectivity.

The results demonstrated that Safaricom’s business model remains highly resilient despite increasing competition in the telecommunications sector. While voice revenue growth slowed, data consumption and financial services continued to expand rapidly, helping offset traditional telecom pressures.

M-Pesa Growth Remains the Core Profit Engine

One of the biggest drivers behind the strong performance was continued expansion in M-Pesa growth, which remains the backbone of Safaricom’s profitability.

M-Pesa revenue in Kenya rose by approximately 13.4 percent to Sh182.7 billion during the period. The mobile money platform continues to dominate Kenya’s digital payments ecosystem, handling transactions across businesses, households, banks, and government services.

What makes M-Pesa particularly valuable is its ability to generate high-margin recurring revenue while strengthening customer loyalty within Safaricom’s ecosystem. Customers who rely on M-Pesa for daily transactions are more likely to remain connected to Safaricom’s network and use additional services such as mobile data, savings products, credit solutions, and investment platforms.

The company has also continued diversifying M-Pesa beyond simple money transfers. New services such as digital savings, wealth management, merchant payments, and stock trading integration through Ziidi Trader are helping expand revenue streams.

This evolution is strategically important because it positions Safaricom not merely as a telecommunications company but increasingly as a fintech giant. In many ways, Safaricom now operates as a digital financial infrastructure provider for Kenya’s economy.

That transformation creates significant long-term opportunities. As cashless payments expand across Africa and financial inclusion deepens, M-Pesa’s dominance could continue driving earnings growth for years to come.

Expansion To Ethiopia Finally Begins Delivering Results

For several years, investors viewed the expansion to Ethiopia with mixed emotions. While the market opportunity was enormous due to Ethiopia’s large population and historically underserved telecom sector, the project required massive capital expenditure and generated heavy startup losses.

Those concerns now appear to be easing.

Safaricom more than halved its Ethiopia losses to approximately Sh21.2 billion during the financial year. The improvement was driven by better macroeconomic conditions, tariff adjustments, customer growth, and expanding network coverage.

This reduction in losses was one of the biggest reasons group profitability surged so sharply.

The Ethiopia business is strategically critical because it represents Safaricom’s largest growth opportunity outside Kenya. Kenya’s telecom market is relatively mature, meaning future growth will increasingly depend on regional expansion and digital service innovation.

Chief Executive Officer Peter Ndegwa expressed confidence that the Ethiopia operation is now on a clear path toward breakeven by 2027.

If Safaricom successfully achieves profitability in Ethiopia, the impact could be transformational. The company would gain access to one of Africa’s largest consumer markets while reducing dependence on Kenyan revenue alone.

For investors, this possibility significantly improves the company’s long-term growth outlook.

Mobile Data Revenue Continues Accelerating

Another major contributor to the strong results was rapid growth in mobile data revenue.

Connectivity revenues, including mobile data, voice, and messaging, rose to nearly Sh198 billion. Mobile data remained the strongest-performing segment as internet usage continued rising across Kenya.

This trend reflects broader changes in consumer behavior. Increasing smartphone penetration, video streaming, online education, social media usage, digital banking, and remote work have dramatically increased demand for reliable internet connectivity.

Unlike traditional voice services, which face stagnation due to competition and changing communication habits, mobile data still offers substantial growth potential.

Safaricom has invested heavily in expanding network coverage, improving internet speeds, and strengthening fiber infrastructure. Fixed service revenue from the company’s home fiber business also grew by over 12 percent during the period.

These investments are important because future telecom competition will increasingly revolve around data quality, digital ecosystems, and enterprise services rather than simple voice communication.

Why the Dividend Increase Matters to Investors

The announcement of a 67 percent dividend increase carried major psychological and financial importance for investors.

For years, some shareholders worried that Ethiopia-related spending would permanently weaken Safaricom’s ability to maintain strong dividend payouts. Those fears intensified as profits came under pressure during the early stages of expansion.

The latest payout effectively changes that narrative.

Safaricom’s proposed dividend of Sh2 per share represents its strongest shareholder return in years and signals renewed financial confidence from management.

Dividend-paying stocks are especially attractive in uncertain economic environments because they provide investors with steady income in addition to potential share price appreciation. In Kenya, where interest in income-generating investments remains strong, Safaricom’s dividend announcement could further strengthen demand for the stock.

The payout is also significant for institutional investors such as pension funds, insurance firms, and collective investment schemes that rely heavily on dividend income.

Safaricom remains one of the largest and most influential stocks on the Nairobi Securities Exchange, meaning its performance affects broader market sentiment and investor confidence.

What the Results Mean for the Nairobi Securities Exchange

The strong results could have a broader positive impact on the Nairobi Securities Exchange.

Safaricom is one of the NSE’s most dominant companies by market capitalization and trading activity. When Safaricom performs strongly, it often boosts overall investor confidence in Kenyan equities.

The company’s improved profitability and higher dividends may encourage both local and foreign investors to increase exposure to Kenyan stocks, particularly at a time when many frontier markets are competing for international capital.

The strong performance may also help stabilize sentiment around Kenya’s corporate sector, which has faced concerns about taxation, inflation, currency weakness, and slowing economic growth in recent years.

For retail investors, Safaricom continues to represent one of the most recognizable and accessible investment opportunities in the Kenyan market.

Safaricom’s Strategic Shift Into a Technology Ecosystem

Beyond the headline earnings figures, the results highlighted something even more important: Safaricom’s successful transition from a telecommunications provider into a broader technology ecosystem.

Today, the company operates across multiple high-growth sectors including fintech, enterprise technology, cloud services, digital payments, fiber internet, and regional telecom infrastructure.

This diversification reduces dependence on traditional telecom revenue while opening new long-term opportunities.

The company’s ability to integrate financial services with connectivity gives it a major competitive advantage. Few African companies possess Safaricom’s scale, customer trust, infrastructure reach, and data ecosystem.

As Africa’s digital economy expands, companies controlling payment systems, internet infrastructure, and customer ecosystems are likely to become increasingly dominant.

Safaricom appears well positioned to benefit from that transformation.

Risks Still Facing Safaricom

Despite the impressive results, several risks remain.

Competition within Kenya’s telecom and fintech sectors continues intensifying. Rivals are aggressively targeting mobile money services, data customers, and enterprise solutions.

Regulatory pressure also remains a concern. As Safaricom’s influence within Kenya’s economy grows, regulators may continue scrutinizing pricing, market dominance, and competition practices.

Currency volatility poses another risk, especially regarding operations in Ethiopia. Foreign exchange fluctuations can significantly affect profitability and investment returns.

Additionally, sustaining rapid growth becomes increasingly difficult as companies mature. Safaricom must continue innovating to maintain momentum.

However, the company’s latest results suggest management is successfully navigating many of these challenges.

Investor Sentiment Turns Increasingly Positive

Market sentiment surrounding Safaricom appears to be improving sharply following the results announcement.

Many investors had previously adopted a cautious stance due to Ethiopia-related uncertainty. The latest earnings report may now shift perception toward optimism as the expansion begins showing measurable progress.

Online investor discussions increasingly highlight Safaricom’s improving valuation, dividend strength, and long-term regional growth potential.

The company’s ability to maintain strong dividends while simultaneously funding regional expansion is particularly impressive. According to management, Safaricom achieved the latest payout despite investing more than $1.2 billion into Ethiopia without significantly increasing debt levels.

That financial discipline could strengthen investor trust moving forward.

A Defining Moment for Safaricom

The latest results may ultimately represent a defining turning point for Safaricom.

For several years, the company balanced between protecting shareholder returns and financing one of Africa’s most ambitious telecom expansion projects. Many investors questioned whether the Ethiopia gamble would eventually pay off.

The latest earnings suggest that the strategy may finally be entering its reward phase.

With earnings reaching Sh99.7 billion, dividends rising by 67 percent, M-Pesa continuing to expand, and Ethiopia losses narrowing sharply, Safaricom has reinforced its position as one of Africa’s strongest corporate success stories.

The company now stands at a critical intersection of telecommunications, fintech, and digital infrastructure, sectors expected to dominate Africa’s economic future.

For shareholders, the increased dividend offers immediate financial rewards. For long-term investors, the bigger story may be Safaricom’s growing potential to become an even larger regional technology powerhouse in the years ahead.