Safaricom’s half-year profit up to Sh14bn

Strong growth in data, messaging and mobile money services helped Safaricom set a new profitability record in Kenya’s corporate sector as it declared a half-year after tax income of Sh14.7 billion.

Financial results released on Tuesday showed that the company broke its own half-year record of Sh11.2 billion set last year, surpassing it by almost a third.

Total revenues in the six-month period went up 15 per cent to Sh79.3 billion. Though voice services remained the company’s biggest income earner, growth was mainly driven by increasing uptake of non-voice services.

In the period, revenues from mobile data services increased by more than half to Sh6.5 billion while income from M-Pesa went up by a quarter to Sh15.6 billion.

“Mobile data continues to be a key pillar for future growth. The company will continue to increase smartphone and 3G device penetration. Non-voice services, together with mobile money, remain our biggest opportunity for growth,” chief executive Bob Collymore told investors at the company’s headquarters.

Despite the strong performance, the firm’s board did not recommend an interim dividend for shareholders. 

IMPACT ON FREE CASH FLOW

Mr Collymore said there would be an impact on the mobile phone company’s free cash flow as it begins building the Sh15 billion national security network that it was contracted by the government to set up for the Kenya Police.

The project’s implementation, he said, would take longer than earlier anticipated after a parliamentary probe delayed the signing of the contract.

“We hope to agree on everything and sign the contract in the next two weeks now,” he said.

In July, the Communications Authority of Kenya renewed Safaricom’s licence for a further 10 years but gave a stern warning that the mobile operator must improve its network quality.