Safaricom full-year results with CEO Peter Ndegwa

East Africa's largest telecoms operator, Safaricom, has recently released its full-year results, revealing a 22.2% decline in net profit for the year ending March 2023, largely attributed to significant capital investments in Ethiopia. The operator's profitability decreased to 52.48 billion shillings from 67.49 billion shillings in the previous period. Despite this decline, Safaricom's CEO Peter Ndegwa remains focused on steering the company towards success and delivering promising returns to shareholders. In a recent interview with CNBC Africa's Terryanne Chebet, Ndegwa shed light on the factors affecting Safaricom's performance and the company's transition from a telecommunications giant to a technology powerhouse. Key Theme: Safaricom's Strategic Positioning Amid Economic Challenges As Safaricom grapples with the impact of global economic instabilities, currency fluctuations, and market movements, CEO Peter Ndegwa emphasized the resilience of Safaricom's business fundamentals. Despite external pressures, such as the Russia-Ukraine conflict, inflationary trends, and currency risks in emerging markets, Ndegwa remains confident in Safaricom's growth trajectory. The company's strategic focus on financial services, enterprise solutions, mobile data, and government support has bolstered its position amidst market uncertainties. Key Points: 1. Market Dynamics and Shareholder Behavior Ndegwa highlighted three key factors influencing Safaricom's share price on the Nairobi Stock Exchange. He noted that international investors have been selling shares due to global crisis concerns, leading to a flight to quality assets like US dollars and bonds. Meanwhile, local and long-term investors have shown confidence in Safaricom's resilience, contributing to buying activity. The recent volatility in Kenya's currency and liquidity challenges have also impacted shareholder behavior, affecting Safaricom's market performance. Despite these challenges, Ndegwa reiterated the company's solid business fundamentals and robust growth prospects. 2. Transition to a Technology Company Safaricom's strategic shift from a telecoms company to a technology-driven enterprise is a key focus for Ndegwa. By leveraging innovation and technology, Safaricom aims to address societal issues and enhance customer experiences. The company's initiatives, such as the Haslapha loan program and digitization projects with county governments, demonstrate Safaricom's commitment to providing solutions beyond traditional telecom services. Ndegwa highlighted the importance of agility in driving technological innovations and delivering impactful solutions like Haslapha Fund and digital government services. 3. Future Prospects and Ethiopian Expansion While Safaricom faces short-term challenges related to startup costs in Ethiopia, Ndegwa remains optimistic about the company's long-term growth potential in the region. With a vision to replicate Safaricom's success in Kenya within Ethiopia over the next 12 years, Ndegwa underscored the significance of strategic investments and operational resilience. By capitalizing on Ethiopia's emerging market opportunities and leveraging technology-driven solutions, Safaricom aims to expand its footprint and establish a strong presence in the Ethiopian market. Quote: Reflecting on Safaricom's journey towards becoming a technology company, Ndegwa stated, 'We are using innovation and technology to solve issues that affect customers and society. Our transition to a technology company enables us to deliver solutions that have a meaningful impact on both consumers and enterprises.' Safaricom's commitment to innovation, strategic positioning, and long-term vision underpins its resilience amidst economic challenges and sets the stage for future growth and success.