Safaricom posts 14% increase in net profit
Strong customer growth, M-PESA and fixed data contributed to Safaricom’s 14 per cent rise in net profit of Sh35.65 billion for the six months ended September 30, 2019.
The growth of the three offset decline in the traditional revenue streams and soft performance on mobile data which registered a 4.0 per cent growth in revenue as the firm carries the effect of corrective actions taken in the prior year.
Speaking during investors briefings, Safaricom Acting Chief Executive Officer, Michael Joseph, said the M-PESA sustained its growth recording a growth of 18.2 per cent despite the impact of the slow-down in the gaming industry.
“The growth was driven by 12.4 per cent year on year increase in 30-day active M-PESA customers to 23.61 million and a 7.8 per cent growth in monthly usage per customer to 13 chargeable transactions per month,” Joseph said.
Mobile data registered a 4.0 per cent growth in revenue while fixed service revenue registered a growth of 18.4 per cent and contributes 3.7 per cent of total service revenue in the period during the period.
He said about 2.6 million active M-PESA customers increased thereby propelling the service to account for 33.8 per cent of service revenue, further accelerating displacement of traditional voice and messaging services.
Joseph said the gaming revenue grew by 20.9 per cent and chargeable transactions per customer per month grew 17.5 per cent.
“Mobile data now accounts for 15.9 per cent of service revenue and registered an impressive 14.6% growth on the revenue earned in the second half of last year,” he said.
He said the growth in mobile data revenue is expected to return to double digits in the second half of this year driven by increased penetration and usage.
“Our top priority for the first half of this year continues to be our customers, specifically regaining their trust and in the process growing our market share,” he said.
Joseph said the company will continue to accelerate its digital transformation and agile agenda and will continue to focus on digital engagement with customers to enable Safaricom to enhance and simplify its customer service offerings.
He said the company intends to sustain the momentum of investing in the quality of its service and growth in its portfolio including deeper penetration of M-PESA into the economy, cloud and Internet of things (IoT) solutions, agricultural and e-commerce platforms, regional expansion and new business opportunities.
Voice declined 1.4 per cent while messaging declined 11.0 per cent on account of competitive pressures and migration to newer technologies and partly by the impact of corrective actions were taken last year