Kenya’s largest telecommunications company; Safaricom, has announced a 14.7 per cent (63.4 billion Kenyan Shillings) increase in net profit for the year which ended in March 2019.
Safaricom’s service revenue saw a growth of seven percent to 240.3 billion Kenyan Shillings, from (to a rather large extent) M-Pesa charges and outgoing voice calls.
The company’s record profits, have surpassed KCB Group, Equity Group and East African Breweries Limited’s combined net earnings, further cementing the telco giant’s dominance in the nation’s economy.
While Safaricom’s earnings from voice (which has always traditionally been the company’s main source of revenue) have long since declined and now account for only 36 per cent of overall revenue (a far cry from the 60 percent figure it commanded just five years ago), outgoing voice service revenue grew by 0.3 per cent to 95.9 billion Kenyan Shillings.
M-Pesa revenue increased 19.2 percent to 74.99 billion Kenyan Shillings.
Although its mobile data revenue increased by 6.4 per cent to 38.69 billion Kenyan Shillings, its messaging revenue saw a decline of 1.3 per cent to 17.50 billion Kenyan Shillings, a rather clear indication that a lot of users, are moving to web based platforms like WhatsApp, for sending and receiving messages.
This has seen Safaricom weaning itself from/of its reliance on voice and SMS, and shifting its focus towards broadening its data and mobile money services, a move which will very likely, provide the telco’s next revenue streams.
During the year, there was also a 7.4 per cent increase in the number of users to 31.8 million, which aided the 7 percent revenue growth in its services.
In addition Fuliza, which allows users with inadequate funds to make purchases or pay utility bills, has seen a very impressive adoption by Safaricom’s users.
According to the company’s (Safaricom) CEO Bob Collymore, users in Kenya have so far borrowed 45 billion Kenyan Shillings via Fuliza since its launch in January 2018, with a total of 8.8 million users having used the service.
With 45 billion Kenyan Shillings borrowed in just four months, the newly launched overdraft facility (Fuliza), is proving to be a Big gold mine.
The company directors have also recommended the approval the payment of a normal dividend per share of Sh1.25 representing a total dividend of Sh50.08 billion.
Said directors in addition, recommended a special dividend per share of 0.62 Kenyan Shilling, representing a total special dividend of 24.84 billion Kenyan Shillings.
The telco giant reportedly paid 98.13 billion Kenyan Shillings in duties, taxes and licence fees to the government.
Safaricom had earlier on lost a certain percentage point of its subscriber market share in the period to the end of December, its fifth straight quarterly fall.
The firm, part-owned by South Africa’s Vodacom and Britain’s Vodafone, shed 0.9 percentage points of subscriber market share to 63.3 percent, compared with 71.9 percent in September 2017 when the losing streak started.
But with reports of this year’s net profit, as well as the just announced increase in subscribers, the company is well on its way to far greater times.
