Capital Markets
Safaricom stock jumps 6.8pc on Kenya unit profit growth
Friday November 10 2023
Smartphone with logo of Kenyan mobile network operator Safaricom PLC. PHOTO | SHUTTERSTOCK
Safaricom’s share price jumped 6.8 percent on Thursday after the company reported a growth in earnings from the mainstay Kenyan operation.
The share price hit Sh13.30 from Sh12.45 on Thursday, rising from a 52-week low of Sh11.50 on Monday this week.
The company topped trades at the Nairobi Securities Exchange (NSE), posting a turnover of Sh230.2 million with 17.3 million shares traded.
Read: Retail investors buy extra 51.9m Safaricom shares
On Thursday, the telecoms operator provided more impetus for the return of investor interest to the stock, having also affirmed the retention of its dividend policy, with an interim dividend announcement lined up in the first quarter of 2024.
Despite being a darling of investors, Safaricom’s share price has taken a beating all year, largely from sell-downs by foreign participants who have shunned the NSE for comparatively higher returns from assets in advanced economies in the face of rising interest rates.
Safaricom’s share price closed as the second top gainer yesterday after Williamson Tea Kenya and with a foreign participation rate of 85.6 percent.
The telco’s share price nevertheless remains below its 52-week high of Sh29 and with returns remaining in loss territory on a year-to-date basis.
Safaricom revised its full-year guidance on earnings before interest and tax, pointing to better-than-expected earnings in the first six months of its financial year to the end of September.
Kenya carried the weight of the group’s Sh27.1 billion net profit in the half-year that marked a slight decline from Sh30.2 billion a year earlier.
Read: Is Safaricom share at the NSE oversold?
The group’s service revenues in the period grew by 9.3 percent to Sh159.1 billion. Resilience in Kenyan operations has enabled Safaricom to partly offset losses from capital expenditure on its Ethiopia expansion operations.
