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Safaricom Records 12PC Rise In Profits To Ksh37 Billion Following End Of Free M-pesa Transactions

Peter Ndegwa
Safaricom CEO Peter Ndegwa. [Photo/ Courtesy]

Safaricom has recorded a 12 percent rise in half-year to September net profit to Ksh37 billion driven by M-Pesa revenue following the end of free transactions.

Service revenue grew 16.9 percent 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 Ksh1,000 beginning January 2021, and improved consumer confidence and business activity in the economy.

In the period, one-month active customers grew 4.7 percent 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 percent to 20 percent effective July 1, 2021, Safaricom absorbed tax on mobile data and passed on tax on voice and fixed which slowed down industry momentum.

Read: Safaricom Employees Evacuated from Ethiopia Amid Conflict

M-Pesa revenue recorded strong performance growing 45.8 percent following the return to charging at the beginning of January 2021. Total transaction value grew 51.5 percent to Ksh13.7 trillion while the volume of transactions grew 42.0 percent 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 percent of the total value of M-Pesa transactions.

Chargeable transactions per one-month active customers grew 91.9 percent 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 percent 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 percent to 17million, data customers using more than 1GB increased 26.7 percent to 6.8 million while active 4G devices grew 37.3 percent to 9.7 million.

Effective rate per MB declined 27 percent in H1 FY22.

Read: Safaricom Tops Up Maxine Wahome’s Sponsorship with Sh2 Million

Fixed service and wholesale transit revenue grew 21.1 percent to Ksh5.5 billion supported by 20.1 percent growth in enterprise revenue to Ksh3.5 billion and 22.9 percent growth in consumer revenue to Ksh2.0 billion.

Fibre to the home customers grew 17.1 percent to 153,400 while enterprise fixed customers grew 38.3 percent to 44,900.

Capital expenditure for the six months ended 30 September 2021 stood at Ksh22.81 billion growing at 0.3 percent YoY.

4G, 3G and 2G population coverage now stands at 95.9 percent, 96.3 percent and 96.9 percent respectively.

As at September 30, 2021, borrowings were Ksh77 billion while cash and cash equivalents stood at Ksh26.45 billion leaving a net debt position of Ksh50.54 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 Ksh62.83 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
Ksh978.25 billion.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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