Safaricom has posted a 12 per cent rise in half-year to September net profit to Sh37 billion.
The increase has been driven by M-Pesa revenue following the end of free transactions.
Service revenue grew 16.9 per cent supported by strong execution, recovery in M-Pesa revenue following the return to charging on Person to Person and Lipa na M-Pesa transactions below Sh1,000 beginning January 2021, and improved consumer confidence and business activity in the economy.
Safaricom Plc Chief Executive Officer Peter Ndegwa says the company has improved the functionality of the platform leading to more usage by customers.
“Beyond the economy recovering and us getting back to charging, there has been a significant focus on innovation. We have for instance recently launched the M-Pesa application which has already seen four million downloads in three to four months,” he said.
In the period, one-month active customers grew 4.7 per cent to 31.75 million adding 1.4 million customers to the base.
Following the increase of excise duty on airtime and other telephony services from 15 per cent to 20 per cent effective July 1, 2021, Safaricom absorbed tax on mobile data and passed on tax on voice and fixed which slowed down industry momentum.
M-Pesa revenue recorded strong performance growing 45.8 per cent following the return to charging at the beginning of January 2021. Total transaction value grew 51.5 per cent to Sh13.7 trillion while the volume of transactions grew 42.0 per cent YoY to 7.3 billion.
M-Pesa wallet to bank and bank to M-Pesa wallet transactions continue to be free and these account for 18.1 per cent of the total value of M-Pesa transactions.
Chargeable transactions per one-month active customers grew 91.9 per cent to 18.1 transactions.
“Innovation in digital financial services has been a key growth driver for M-Pesa. We continue leveraging on technological innovation to enhance access to financial services for consumers and enterprise customers,” said the telco.
Mobile data revenue grew 6.3 per cent weighed down by price rationalization, absorbed tax from excise duty adjustment on data from August 2021 and a lapping effect of the accelerated growth recorded at the onset of the Covid-19 pandemic in Kenya.
Distinct data bundle customers grew 8.1 per cent to 17million, data customers using more than 1GB increased 26.7 per cent to 6.8 million while active 4G devices grew 37.3 per cent to 9.7 million.
Effective rate per MB declined 27 per cent in H1 FY22.
Fixed service and wholesale transit revenue grew 21.1 per cent to Sh5.5 billion supported by 20.1 per cent growth in enterprise revenue to Sh3.5 billion and 22.9 per cent growth in consumer revenue to Sh2.0 billion.
Fibre to the home customers grew 17.1 percent to 153,400 while enterprise fixed customers grew 38.3 per cent to 44,900.
Capital expenditure for the six months ended 30 September 2021 stood at Sh22.81 billion growing at 0.3 per cent YoY.
4G, 3G and 2G population coverage now stands at 95.9 per cent, 96.3 per cent and 96.9 per cent respectively.
As at September 30, 2021, borrowings were Sh77 billion while cash and cash equivalents stood at Sh26.45 billion leaving a net debt position of Sh50.54 billion.
“To support the payment of license fees for the telecommunications license awarded to the Safaricom-led consortium by the Government of Ethiopia, we undertook a one-year bridge facility of USD 400Mn to finance this venture. We are currently seeking to term out the bridge facility through a long-term debt arrangement so as to manage our working capital requirements in the short term and minimize the currency risk for the dollar loan,” added Safaricom.
Safaricom remitted Sh62.83 billion in duties, taxes and license fees for the six months to September 30, 2021. This increased the total duties, taxes and fees paid since inception to Sh978.25 billion.
Safaricom board Chairman Michael Joseph expects the company’s performance to strengthen further with the firm adapting to the tough operating environment in the past 18 months.
