Safaricom records flat growth in tough financial year

Safaricom unveils M-Pesa Super App with new features
Image: Peter Ndegwa, Chief Executive Officer, Safaricom

Mobile network operator Safaricom, has announced its financial results which showed a flat growth in the financial year ending March 2021, despite the tough economic climate brought about by the COVID-19 pandemic.

During this period, Safaricom enabled Kenyans to reduce the impact of the pandemic by waiving fees for transactions below a KES 1,000, which saw free transactions worth KES 4.4 billion ($41 million) processed.

According to a statement issued, service revenue recorded a marginal decline of 0.3% to close at KES 250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5% YoY to KES 44.79 billion.

M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1% drop YoY to KES 82. 64 billion and voice dropped by 4.6% to register revenue of Kshs 82.55 billion, whilst Earnings/profit Before Interest and Tax delivering ahead of guidance was at KES 96.16 billion.

Commenting on the performance, Safaricom CEO Peter Ndegwa said, “We remained resilient in a disruptive year, demonstrating strong operational capacity, diligence and commitment in supporting the country, our customers and shareholders through this uncertain time. Our immediate focus in the year has been to ensure that network capacity, operations and financial services are prioritized to limit disruptions.”

M-PESA accounted for 33.0% of the total service revenue down from 33.6% last year, impacted by the waiver of the Peer-to-Peer (P2P) transactions fees.

To support Micro and Small Medium Enterprises (MSMEs), the company introduced the Pochi la Biashara, M-PESA Business App, Bill Manager, Merchant Transacting till and Self On-Boarding process.

Safaricom has also announced that the consumer M-PESA App will be launched in quarter one of the current financial year.

Commenting on the future of the business, Ndegwa noted, “Despite a tough financial year, the company is committed to investing in the business and maintaining a consistent dividend payout ratio in line with our dividend policy. Our guidance for the Financial year 2022 is at the range of KES 105 – 108 billion for Earnings Before Interest and Tax and Capital Expenditure guidance in the range of KES 40-43 billion.”