Safaricom announces 14.4% rise in net profit


Safaricom announces 14.4% rise in net profit
CEO Michael Joseph

Safaricom has announced a 14.4% rise in net profit for the first half of the year to September 30, 2019.

CEO Michael Joseph said the company’s net profit for the period was Ksh. 35.7billion, growth that was attributed to MPesa and fixed data.

“Customer growth remained strong in the first half of this year and we have more than doubled our net additions versus last year,” Mr Joseph said on Friday.

The CEO noted that guidance for financial year 2020 remains at Ksh. 93-97 billion in earnings before interest and tax and Ksh. 36-39 billion in capital expenditure.

He further revealed that MPesa has been on a steady climb with a 12.4% growth in customer numbers and 11.4% growth in usage.

“M-PESA now accounts for 33.8% of service revenue. Revenue growth for the year was driven by M-PESA, growing by Ksh.6.5 billion, or 18.2% year over year,” he said.

Mobile data customers are said to have grown by 14.8% with a positive outlook for second half expected with a sustained momentum.

Data consumption per customer per MB was reported to have increased by 43.6% while savings and lending contributed 5.7 ppts, or two thirds of this driven by Fuliza.

In just 9 months, Fuliza’s revenue made up half the revenue in the saving and lending bucket, he said adding that Safaricom also remitted Ksh. 98.13 billion in duties, taxes and license fees.

Mr. Joseph aslo revealed that the Safaricom App has over 4.09million downloads. It’s market share now stands at 63.5% according to data from the Communications Authority.

Safaricom Board Chairman Nicholas Ng’ang’a noted that Friday’s briefing was the first one without the late Bob Collymore in the last thirteen years.

He added that Mr. Joseph had agreed to stay on as CEO for the reminder of Financial Year to March 31, 2020.

He also cited the intended Airtel-Telkom merger saying Safaricom welcomes the merger but has raised a number of issues for the regulators to address as part of their approval process.

“The first is the debt owed by the two operators, amounting to about Ksh.1.2 billion incurred for the provision of various services including interconnection, co-location and fibre services. The second is the need to rebalance the frequencies allocation,” he said.

He also called for equal treatment of operators and creation of a level playing field within the industry, specifically in relation to licensing and operations requirements.

Proposed amendments to the Kenya Information and Communication Act that are before Parliament was also raised as a concern as it would require businesses such as Safaricom to separate their GSM and mobile money businesses.

“Prescriptive legislation of that nature may end up dampening the investor markets and we would therefore urge caution,” he said.

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