Safaricom net profit has grown by 14.7 percent to Sh63.4 billion on strong M-Pesa and mobile data performance, marking the seventh straight year of increasing bottom-line.
The performance, covering the financial year ended March 2019, came on the back of total revenue growing by 7.1 per cent to Sh250.96 billion as revenue from voice, M-Pesa, mobile data and fixed service grew.
Chief Executive Officer Bob Collymore said it was commendable that the telco continued to generate positive momentum in a year where macro issued weighed in on customer choice.
“We achieved this by focusing on the customer, investing in the quality of our service, the performance of our network and creating differentiated customer experiences,” said Mr Collymore.
During the period, service revenue was up seven per cent to Sh240.3 billion. This was supported by M-Pesa revenue growth of 19.2 per cent to Sh74.99 billion as fixed service revenue increased by 22.7 per cent to Sh8.19 billion.
Flat voice revenue
Voice revenue, which makes up the bulk of the revenue, had a flat growth. It grew by 0.3 per cent to Sh95.94 billion.
Mobile data revenue grew by 6.4 per cent to Sh38.69 billion. However SMS revenue dropped 1.3 per cent to Sh17.5 billion.
Against this performance, Safaricom board has proposed payment of a special dividend of Sh0.62 per share amounting to Sh24.84 billion.
This is in addition to the first and final dividend of Sh1.25 per share totalling Sh50.08 billion. This is 13.6 per cent higher than Sh44.07 billion that was paid last year.
“The board remains committed to investing in the business and continuing our strong record of paying progressive dividends each year,” said Mr Collymore.
In its financial outlook for 2020, the firm wants to fund capital expenditure with a budget of between Sh36 billion and Sh38 billion.
The firm said Kenyans have already borrowed Sh45 billion on Fuliza— a service that allows M-Pesa customers to complete their transactions when they have insufficient funds in their account.
The growth of the overdraft service is an indicator of Kenyans’ growing appetite for instant loans to spend.
Highlights
Here are the highlights of the report released to investors at the company’s headquarters in Westlands:
- Service revenue growth of 7 per cent to Sh 240.30bn.
- Voice service (incoming and outgoing) revenue grew by 0.3 per cent to Sh95.94bn.
- M-PESA revenue grew by 19.2 percent to Sh 74.99bn.
- Mobile data revenue increased by 6.4 per cent to Sh38.69bn.
- Messaging revenue declined by 1.3 percent to Sh17.50bn.
- Fixed service revenue increased by 22.7 per cent to Sh8.19bn.
- Total customer base increased by 7.7 percent to 31.8m.
- 30-day active M-PESA customers increased 10.2 percent to 22.6m.
- 30-day active mobile data customers increased 6.6 percent to 18.8m.