Safaricom profit hits Sh11bn riding on data and M-Pesa

Strong growth in data and mobile money services in the six months through September propelled Safaricom to the best half year performance since listing at the Nairobi bourse in 2008.

The company’s net profits for the period increased by almost a half to Sh11.3 billion, up from the Sh7.77 billion reported during a similar period last year.

On Tuesday, chief executive Bob Collymore said the company had solid growth all round with non-voice services being key contributors.

“Non-voice service revenue streams continue to deliver solid growth having increased by 30 per cent,” Mr Collymore told investors in Nairobi.

Growing customer base

Total revenues went up by 17 per cent to Sh69.2 billion, with voice, the firm’s biggest revenue stream, contributing about 61 per cent from 20.8 million customers.

SMS (Short Messaging Services) had the highest growth of any single revenue stream at 48.7 per cent to Sh6.35 billion.

Growth was stimulated by promotions such as the recently concluded Bonyeza Ushinde na Safaricom.

FUTURE DRIVERS

Earnings from data, on the other hand, grew at 37.4 per cent to Sh5.7 billion, triggered by an increase in customers from 5.59 million the previous period to 8.48 million.

However, the average revenue per user in mobile data fell by 5.18.

“We gained 2.9 million customers in the data segment but they have not yet grown to match the spending of earlier adopters,” said Safaricom chief financial officer, Mr John Tombleson.

In the wake of dwindling revenues from the traditional voice revenues, the firm has earmarked data and mobile money as its future drivers of growth.

In the period under review, M-Pesa, the firm’s mobile money service, which was started in 2007, remained key contributing 18 per cent of total revenue.

The service generated Sh12.5 billion due to a 19 per cent increase in active M-Pesa customers from 9.7 million to 11.6 million and an increase in the average number of transactions per customer.

M-Pesa agent outlets also grew by 73 per cent to 78,856. Mshwari, the saving and credit service offered on M-Pesa had 2.3 million active users, with Sh1.7 billion deposits and Sh700 million lent out.

FINANCIAL INCLUSION

“We also launched the Lipa na M-Pesa service which enables cashless merchant payments and facilitates trade between businesses and their customers,” Mr Collymore said.

“We are well on course in our strategy to deepen financial inclusion and embed the service as an integral part of the Kenyan society and economy”.

“As part of our commitment to democratize access to affordable broadband in Kenya, we have requested the Government of Kenya to allocate to Safaricom additional spectrum resources to facilitate the nationwide rollout of a 4G or LTE networks over the next 24 months,” Mr Collymore said.

The company’s shares at the Nairobi Securities Exchange eased to close Tuesday trading at Sh9.65 after touching an all-time high of Sh9.90 on Monday.

Reported by MUTHOKI MUMO and CHARLES WOKABI.