Safaricom’s profit after tax increases by 38 per cent to Sh31.9billion

NAIROBI, KENYA: Safaricom has reported an increase in profit after tax by 38 per cent to Sh31.9b for the year ended March 31, 2015.

Chairman Nicholas Ng'ang'a also said Safaricom had extended Collymore's term as chief executive for two years.

Chief Executive Officer Bob Collymore attributed the growth to best services offered during the year which includes financial inclusion through MPesa.

“We continue to strive to deliver the best service to our customers and for that we have been rewarded with strong commercial and financial performance. We have delivered on our goal to transform lives by providing unmatched services; improving our network quality; and deepening financial inclusion with the customer uptake of Lipa na MPesa,” he said.

“Our 4G network is now available in Nairobi and Mombasa, and we will roll out to another 13 towns and cities by year end. This is a first for Kenya and will enable our customers to experience superfast home broadband and mobile data offerings.”

In December 2014 the Government of Kenya entrusted Safaricom to build the National Police Network in Nairobi and Mombasa to help with security. Delivery of this 4G push-to-talk network and CCTV cameras is progressing, with phase one on schedule to be launched at the end of May 2015.

The operator’s  total revenue grew by 13 per cent to Shs163.4bn through focusing on providing quality services that resulted in double digit growth across non-voice service revenue streams.

Voice service revenue which now stands at 54 per cent of total revenue grew at 4 per cent while non-voice service revenue which accounts for 42 per cent of total revenue, sustained its growth trajectory with a 27 per cent increase to Shs 68.8bn driven mainly by Data and MPesa. Devices and other revenue contribute 4 per cent of total revenue.

Mobile penetration in Kenya stood at 80.6 per cent with Safaricom recording the largest subscriber share of 67.4 per cent. “Our customer base has grown by 8 per cent to 23.3m while churn rate dropped to 17.3 per cent as a result of efforts centered on retaining and rewarding our loyal customers.”

Voice service revenue grew 4 per cent to Shs 87.4bn, this growth was supported by loyal customer base attracted by a superior network experience, convenient airtime distribution and attractive consumer propositions and promotions such as the ‘Tetemesha’ campaign.

Messaging revenue increased by 15 per cent to Shs15.6bn which represents 10 per cent of our total revenue. This was driven by increased usage from affordable SMS bundles and SMS based promotions such as‘Bonyeza Ushinde’.

MPesa, now contributing 20 per cent of total revenue, continues to be a significant driving factor in growth. This was driven by a 14 per cent increase in 30 day active MPesa customers to 13.9m as well as an increase in the average number of transactions per customer. In the year, Safaricom expanded MPesa agent outlets to 85,756 thereby promoting accessability of the service to customers.

Since its launch, the Lipa na MPesa service has enabled cashless merchant payments and facilitated trade between businesses and their customers while improving business efficiency.  In March 2015 the service had 49,413 merchants active on a 30 day basis, who received Shs 11.6bn of payments.

Mobile data revenue grew at an impressive 59 per cent driven by an increased uptake of affordable data bundles and a 21 per cent growth in 30 day active mobile data customers to 11.6m.  By 31 March 2015 we had 4.3m customers on 3G enabled devices of which 3.4m were smartphones. Fixed data revenue increased by 22 per cent to Shs 3.1bn on the back of 23 per cent growth in fixed data customers.