Profit isn't the end of the story — it's the start of a new question: what actually happens to it? Today you'll follow Safaricom's FY2024 profit out of the income statement and into the balance sheet, and see the three statements as one connected story instead of three separate documents.
In Lesson 1 you saw Safaricom's income statement end with profit for the year: KShs 42,658.4 million for the year ended 31 March 2024. That number is a summary of twelve months of activity. But once the year closes, that profit has to go somewhere — it becomes part of the company's permanent record on the balance sheet.
Broadly, profit that belongs to the company's owners goes to one of two places:
This is the link between the income statement (a period of activity) and the balance sheet (a snapshot): the balance sheet's retained earnings line only moves because of what happened on the income statement. They are not two unrelated documents — one feeds the other.
Safaricom's Group profit for the year is not 100% owned by Safaricom PLC's own shareholders. Some of Safaricom's subsidiaries (for example, in Ethiopia) are not wholly owned — other investors own a slice of them too. Accountants call that slice non-controlling interests (NCI). The income statement splits total profit between the two owner groups:
| KShs millions | FY2024 | FY2023 |
|---|---|---|
| Profit for the year (total) | 42,658.4 | 52,482.8 |
| Attributable to equity holders of the parent | 62,991.7 | 62,268.9 |
| Attributable to non-controlling interests | (20,333.3) | (9,786.1) |
Source: Safaricom PLC Annual Report and Financial Statements 2024, p.177 (audited, currency KShs millions).
Notice the arithmetic works: 62,991.7 minus 20,333.3 equals 42,658.4, the total profit for the year. The non-controlling interests' share (20,333.3 million) belongs to those outside investors, not to Safaricom PLC's own shareholders — it never reaches Safaricom PLC's retained earnings or its dividend. Only the 62,991.7 million attributable to equity holders of the parent is "Safaricom's own" profit, and that's the figure that flows on into the next two places we're about to look at.
It's tempting to assume "profit for the year" is the whole pie available to ordinary shareholders. For a company like Safaricom, with partly-owned subsidiaries, it isn't. Always check whether a profit figure is "total" or "attributable to parent" before you use it to judge what shareholders actually got.
The 62,991.7 million attributable to Safaricom PLC's own shareholders splits, in effect, into two destinations you can see elsewhere in the financial statements:
| KShs millions | 2024 | 2023 |
|---|---|---|
| Retained earnings | 134,314.0 | 121,823.6 |
Source: Safaricom PLC Annual Report and Financial Statements 2024, p.175 (audited, currency KShs millions).
Retained earnings rose by 134,314.0 − 121,823.6 = 12,490.4 million over the year. That's a real, visible link: profit earned on the income statement shows up as an increase in a balance sheet line twelve months later.
The rest of the parent's profit doesn't vanish — it either left the business in cash, or was promised to shareholders but not yet paid. You can see both in the statements:
| KShs millions | FY2024 | FY2023 |
|---|---|---|
| Dividends paid | (42,010.4) | (63,557.8) |
Source: Safaricom PLC Annual Report and Financial Statements 2024, p.180 (audited, currency KShs millions).
| KShs millions | 2024 | 2023 |
|---|---|---|
| Proposed dividend | 26,042.5 | 24,840.6 |
Source: Safaricom PLC Annual Report and Financial Statements 2024, p.175 (audited, currency KShs millions).
"Dividends paid" (in the cash flow statement) is cash that actually left the business during the year — mostly settling the dividend that had been proposed at the end of the previous year. "Proposed dividend" (on the balance sheet) is a promise not yet paid: the board has said shareholders will get this, but the cash hasn't gone out the door yet. That's exactly the kind of timing gap you'd expect once you remember the balance sheet is a snapshot and the cash flow statement covers a period — the two aren't measuring the same moment.
Profit attributable to the parent (62,991.7m) doesn't disappear after the income statement ends. Some of it stays in the business and lifts retained earnings on the balance sheet (+12,490.4m this year); some of it is paid out in cash to shareholders as dividends (42,010.4m paid this year); and some is promised but not yet paid (26,042.5m proposed, sitting on the balance sheet at year-end). This lesson doesn't need you to force these three numbers into one clean sum — with non-controlling interests, prior-year dividend timing, and other reserve movements all mixed in, a full reconciliation needs more detail than we've shown here. The point to take away is simpler and more durable: every line on the balance sheet that changed year to year has a story that traces back through the income statement or the cash flow statement. Nothing on a balance sheet moves for no reason.
Next lesson, we'll look at the Cash Flow Statement in its own right — why Safaricom's operating cash flow (KShs 107,923.6m) is so much larger than its accounting profit (KShs 42,658.4m), and what that gap is actually made of.
Primary source for this lesson's numbers: Safaricom PLC Annual Report and Financial Statements 2024.
Something unclear, or want to dig into a line item we skipped (like "what exactly counts as a non-controlling interest")? Ask your teacher — that's what these sessions are for.