Data, M-pesa to drive Safaricom’s future growth as profit grows by 21.4pc

Safaricom Limited (NSE: SCOM) earnings before interest, tax, depreciation, and amortization (EBITDA)rose to Ksh 54.27 billion for the six months ended September 30.

This is compared to Ksh 50.81 billion shillings in the same period in 2016.

Chief Financial Officer Sateesh Kamath told the investors that the telco witnessed a 9.5 percent increase in net profit to KSh26.2 billion period “It was a strong financial performance underpinned by focusing on customers first and relevant products.”

“The business generated excellent results and has continued to create value for our shareholders, supported by growth in service revenue and focus on cost efficiency.”

Read: Cost cuts to push Safaricom’s EBITDA growth to KES 115.16Bn – Analysts

Key revenue drivers for the half year were fixed service, mobile data and M-Pesa recording growth of 34.7 percent y/y, 31.0 percent y/y and 16.2 percent y/y (respectively).

Fixed data’s tremendous growth was on the back of increased fiber network roll-out and connectivity to homes with homes passed by the network at 90,000, a 98.7 percent growth in the March – September period with 25,000 homes connected from 10,200 homes in a similar period.

M-Pesa revenues grew by 16.2 percent to KSh30.05 billion in the period while data income rose from KSh13.4 billion to KSh17.55 billion. Voice revenue grew from KSh45.7 billion to KSh47.35 billion.

“Data and fixed data, and M-pesa will continue to drive growth for the future. They are becoming the engines of growth,” noted Kamath.

However, Mr Nicholas Ngang’a, Safaricom Board chair noted that the prolonged drought, significant slowdown in credit growth and the country’s repeat presidential election ‘has not been necessarily the best’.

“We can expect that credit, or spend on our network, will likely be similarly affected in coming months, as customers try to stretch every shilling,” he noted.