Mobile operator Safaricom has announced a 14.1% growth in net profit, as its earnings continued to trend higher, setting a new record.

Results released by the company this morning indicate the Kenya’s leading mobile operator and the region’s most profitable company returned a net profit of Ksh55.29 billion in the financial year ending 31^st March 2018, up from last year’s Ksh48.44 billion.

The increased profit was realised from total revenues of Ksh233.7 billion, which grew from Ksh212.9 billion in 2017, representing a growth of 9.8%. Measured against a net profit growth of 14.1%, the performance shows Safaricom managed to contain costs even as it enhanced customer growth and retention.

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“We remained resilient despite the macroeconomic headwinds of a prolonged election period, drought, low credit growth, uncertain regulatory environment and enhanced competitor activity,” said Safaricom CEO Bob Collymore. “Negative post-election sentiments made voice market share retention a challenge during the September to December 2017 quarter.

Key highlights of the results

• Service revenue growth of 10.0% to KShs 224.54bn.
• Outgoing voice revenue grew by 2.4% to KShs 88.96bn.
• M-PESA revenue increased by 14.2% to KShs 62.91bn.
• Mobile data revenue grew by 24.0% to KShs 36.36bn.
• Messaging (SMS) revenue grew by 6.2% to KShs 17.72bn.
• Fixed service revenue growth of 27.3% to KShs 6.67bn.
• Total customer base increased by 5.1% to 29.6m.
• 30-day active M-PESA customers increased by 8.0% to 20.5m.
• 30-day active mobile data customers increased by 6.2% increase to 17.7m.

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Voice and SMS

Voice and SMS slices of the pie have been shrinking as a portion of revenue, however they remained significant and continued to defy global trends, reporting a combined growth of 2.9%. He said this growth has been supported by data-driven segmented and personalized promotions, as well as identifying new market trends and niche use cases for wholesale customers.

Voice grew by 2.3% to Ksh95.64bn, while SMS grew by 6.2% to Ksh17.72bn. Together, voice and SMS revenue now contribute 50.5% of service revenue.

M-PESA

The company maintained a steady momentum in mobile money business, adding 2.1 million new M-PESA customers and achieving revenue growth of 14.2% year on year to Ksh62.91bn. M-PESA now contributes 28.0% of service revenue from 20.9% in 2015, highlighting its central position as a key growth driver alongside mobile data and displacing traditional voice and SMS.

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The company announced it would spend between Sh35 billion  – Sh38 billion in infrastructure expansion. “In FY 2019 we look to drive long-term shareholder value by deploying next-generation network services, leveraging data analytics and segmentation, guided by our purpose of transforming lives to turn innovative ideas into realities,” said Sateesh Kamath, Finance Director at Safaricom

Collymore said Safaricom has put in place measures to embrace the agility required to adapt to the ever-changing industry environment. “Safaricom is well positioned to sustain growth in portfolio and actively manage profitability with new disruptive initiatives and offerings in M- PESA, e-Commerce and Home and Enterprise solutions including use of Internet of Things,” he said.

*ARPU is in Kshs

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