M-PESA recovery drives Safaricom profit up 12 per cent to Sh37 billion
Telco giant Safaricom net profit for the six months to September surged by 12 per cent to Kes37 billion attributable to significant jump in revenues from money transfer service M-PESA.
In the half, M-PESA revenue increased by 45.8 per cent to Kes52.3 billion boosted by the return to charging of transactions under Kes1000 in January this year.
M-PESA now accounts for 37.8 per cent of the telco’s service revenue, overtaking voice segment which edged up by 3.2 per cent to close the half at Kes41.5 billion.
Total M-PESA transaction value went up by 51.5 per cent year-on-year to Kes13.7 trillion while the volume of transactions increased 42 per cent to Kes7.3 billion, the latest financial disclosures show.
“Looking at M-PESA this time from the perspective of values and customers, we are delighted to report that customers have grown 7.1 per cent YoY to close at 28.7 million,” noted Safaricom PLC Chief Finance Officer Dilip Pal.
Customers transacting from M-PESA wallet to bank and bank to M-PESA continue to enjoy free deals and these accounted for roughly 18.1 per cent of the total value of M-PESA transactions.
In June, Safaricom launched M-PESA Super App, which now has over four million downloads and two million active customers.
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The app enables customers and businesses to complete daily and occasional tasks including deliveries, ticket booking, shopping, licenses applications, insurance and much more.
Further, the telco recorded increased growth in data business with the firm’s one-month active bundle customers growing at 8.1 per cent to 16.95 million.
The company’s 4G coverage now stands at 96 per cent while active 4G devices increased by 37.3 per cent to 9.7 million.
“Active 4G devices and data customers consuming over 1GB grew at a much faster pace of 37.3 per cent YoY and 26.7 per cent YoY respectively thus highlighting the opportunity to drive usage,” noted Mr Pal.
The average revenue per user (ARPU) for the 90 day active total customers increased by 4.2 per cent to Kes559.6. The growth was driven by M-PESA, data and fibre to home ARPUs increasing by 31.30 per cent, 8.10 per cent and 4.50 per cent, respectively.
Mobile data revenue increased by 6.3 per cent to Kes23.6 billion weighed down by price rationalization and absorbed tax from increased excise duty that came into effect from August, this year.
In the six-month period, messaging revenue dipped by 18.3 per cent to Kes5.9 billion.
“Our voice traffic share stood at 68.2 per cent as at June 2021 according to Q4 Communications Authority industry statistics report. Voice outgoing minutes have grown 30.2 per cent YoY while incoming minutes grew 13.8 per cent. Outgoing minutes of use per subscriber grew 22.6 per cent,” Safaricom PLC CEO Peter Ndegwa said.
During the period, operating costs increased by 14.65 per cent to Kes68.96 billion mainly driven by direct costs which grew by 20.30 per cent to Kes44.53Bn on the back of a 26.77 per cent growth in M-PESA commissions to Kes15.80 billion.
The management has indicated that the Ethiopian operations will begin in mid-2022 as per the license requirement despite the prevailing political uncertainty the company has continued to set up operating structures with the hiring of top management.
The company is targeting to provide telco, mobile money and digital services with the management expecting that the operations will break even in its fourth year of operation.
