Safaricom makes Sh1,778 per second

Wednesday May 09 2018

From left: Safaricom Corporate Affairs Director Steve Chege, Technical & IT Director Thibaud Rerolle and former Safaricom CEO Michael Joseph during the company’s full year investor briefing on May 9, 2018. PHOTO | DIANA | NGILA | NATION MEDIA GROUP


For every second that passes the financial behemoth that is Safaricom adds another Sh1,778 to its bottom line.

This is money earned from various services to its 29.6 million subscribers going by the results the company announced yesterday for the year ended March 2018.

The company made a record net profit of Sh55.3 billion on the back of M-Pesa and mobile data revenue growth.

The profit by Kenya’s largest listed firm by capitalisation was a growth of 14.3 per cent above the Sh48.4 billion in the previous year. Total revenue grew by a tenth to Sh233.7 billion, also a record by a Kenyan company.

Safaricom’s net profit is now more than twice that of the next most profitable listed firm, KCB’s Sh19.7 billion.



The firm added 1.4 million customers to its books, taking its total base to 29.6 million, with 20.5 million active 30-day M-Pesa users. This means that the company earned a net of Sh1,868 per customer in the 12-month period.

Safaricom chief financial officer Sateesh Kamath on Wednesday said M-Pesa revenue grew 14.2 per cent to Sh62.9 billion while mobile data was up 24 per cent to Sh36.4 billion in the period.

Voice revenue growth remained relatively low at 2.4 per cent to Sh88.9 billion while SMS revenue was up 6.2 per cent to Sh17.7 billion. “M-Pesa and mobile data continued to be the drivers of growth in the year. Contrary to global trends, voice revenues also grew. We also recorded revenue growth in fixed data, a relatively new business, which is already accounting for three per cent of our service revenue,” said Mr Kamath.

Voice and SMS revenue has been hurt by competition from Internet-based communication applications like WhatsApp, which have become popular with users due to lower cost and widespread access with the growth in usage of smart phones.


Safaricom chief executive officer Bob Collymore also sent a surprise message via video link during the investor briefing at the company’s headquarters yesterday, saying he is nearing a return from his extended medical leave in London.

Mr Collymore said he has started the final phase of his treatment and will come back to the country as soon as doctors in London clear him to travel.

He has been away from office since October last year, receiving treatment for an undisclosed ailment.

“I have just entered the final phase of treatment and expect to be back in Nairobi as soon as doctors feel that my immune system is sufficiently robust to withstand the infection risks that are usually associated with airline travel,” Mr Collymore told investors in the video message.

In his absence, Mr Kamath has primarily filled in for him, supported by the company’s director of strategy and innovation Joseph Ogutu. Mr Collymore said he had been engaging with Safaricom’s management team and Board of Directors as well as participating in meetings via video link from London.


He added that the company will continue to invest in growing the M-Pesa and data products.

The huge profit announced by Safaricom will translate into billions of shillings in dividends for shareholders, led by the government and South African telecoms firm Vodacom who hold a 35 per cent stake each in the firm.

The 2017/18 dividend has been set at Sh1.1 a share, up 13.4 per cent from the dividend paid for the year ending March 2017.

The total payout this year to the more than 500,000 Safaricom investors stands at Sh44.1 billion, compared to Sh38.9 billion in the previous year.

The Treasury holds a total of 14 billion shares in Safaricom, and is therefore set to pocket a dividend cheque of Sh15.4 billion from the company, as will Vodacom.


In addition to the dividend, Safaricom said it has also paid Sh24.6 billion in taxes to the government, taking the total earned by the State from the firm during the financial year to Sh40 billion.

In the previous financial year, the Treasury earned Sh35.8 billion from Safaricom in tax and dividends, making the company one of the most lucrative sources of investment revenue for the government.

British telco Vodafone, which is the parent company of Vodacom, will pocket Sh2.2 billion from the five per cent stake it holds in Safaricom.

Vodafone previously held a 40 per cent stake in Safaricom, but ceded 35 per cent to Vodacom last year in a share swap deal worth about Sh266 billion.

The remaining shareholders, two thirds of whom hold less than 1,000 shares each, will together pocket Sh11.1 billion in dividends.