Safaricom Limited Records Strong Financial Performance Despite Tough Economic Climate

This year, Kenya has gone through a period of uncertainty that has seen its second quarter GDP growth slow down to 5% from last year’s 6.3%, being impacted by events like the elections, drought and interest rate capping.

Despite this, giant Telco Safaricom, has performed exceptionally well for the period and ensured sustained returns to their shareholders.

Kenyan-Collective-Safaricom-Half-Year-Results
Safaricom Board of Directors Chairman, Nicholas Nganga (center) with Director of Strategy and Innovation at Safaricom, Joseph Ogutu (left) and Chief Finance Officer and Executive Board member Sateesh Kamath (right) during the announcement of Safaricom half year results 2017 at Michael Joseph Center.

Speaking on the release of the company’s 2017/2018 Half Year Results, Bob Collymore, Safaricom Limited CEO, who is away in medical leave commented:

“We believe this was possible due to the
resilience of our business and our people.
We continued to make good progress during the first half of the year in our strategic growth areas: M-PESA and data, while the traditional telco business continued to defy global trends
recording single digit growth.

Aside from the numbers we are sharing today, we would also like you to consider the significant indirect value contribution of Safaricom to the economy, society and environment using the “True Value” methodology which was developed by an independent audit firm.
In 2016/2017 financial year Safaricom created Kshs.486 billion total value for Kenya Society, 17% growth Year
on Year and 10 times greater than the financial profit the company made in the same year.

Safaricom has also successfully completed the first phase of integrating the UN Sustainable Development Goals (SDGs) into its business and corporate strategy. The integration of SDGs has helped us appreciate that lasting solutions need to be commercially viable and based on feasible economic models if they are to be scalable and sustainable.”

Here’s a breakdown of the results

  • Service revenue grew by 12.0% to Kshs 109.73bn driven predominantly by growth in active users and increased usage of non–voice services mainly M-PESA and mobile data.
  • Non-voice service revenue accounted for 56.8% of service revenue, recording a growth of 19.3% to Kshs 62.38bn.
  • Overall voice service revenue stands at 43.2% of service revenue and remained resilient in the year growing by 3.6% to Kshs 47.35bn.
  • Mobile penetration in Kenya stood at 88.7% as at 30 June 2017, with Safaricom recording a leading subscriber share of 72.6%.
  • The total customer base grew by 10.8% to 29.5m as at 30th September 2017
  • Messaging (SMS) revenue increased by 3.4% to Kshs 8.92bn.
  • M-PESA revenue recorded a growth of 16.2% to Kshs 30.05bn driven by 9.5% increase in 30 day active M-PESA customers to 19.3m.
  • Lipa na M-PESA now has over 70k merchants who are active on a 30 day basis.
  • Mobile data revenue, which accounts for 16.0% of the company’s service revenue, grew at 31.0% to Kshs 17.55bn. This was driven by 13.5% growth in 30 day active mobile data customers to 16.9m, increased bundle users and increased smartphone penetration during the period.
  • Fixed data revenue increased by 34.7% to Kshs 3.23bn attributed to 24.9% growth in fixed service customers.

In the half year under review, a total of Kshs 17.4bn on capital expenditure. The business generated excellent results and has continued to create value for shareholders, supported by growth in service revenue and focus on cost efficiency.

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