Safaricom Posts Ksh37B Half-Year Profit as M-Pesa Drives Growth

East Africa’s largest telco, Safaricom, on Wednesday, November 10 published its Half-Year results for the six months ended 30 September 2021.

The firm’s profit after tax rose 12.1% to Ksh37.05 Billion from Ksh33.06 Billion in the same period last year. Total revenue also grew 17.5% from 124.5 Billion in the same period last year to 146.36 Billion in H1FY22.

Among key contributing factors to the strong performance was the resumption of charges on person-to-person and Lipa na M-Pesa transactions below Ksh1,000 which took effect in January 2021. Improved economic activity with the gradual easing of Covid-19 restrictions also drove growth.

In the period, one month active customers grew 4.7% YoY to 31.75 million adding 1.4 million customers to Safaricom’s base.

“M-Pesa revenue recorded strong performance growing 45.8% YoY in H1 FY22 following the return to charging at the beginning of January 2021. Total transaction value grew 51.5% YoY to Ksh13.71 Trillion while volume of transactions grew 42.0% YoY to Ksh7.3 Billion,” the company noted.

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In line with its strategy to become a purpose-led technology company present across its customers’ lifestyles, Safaricom stated that it continued leveraging on technological innovation to enhance access to financial services for consumers and enterprise customers.

The increase of excise duty on airtime and other telephony services from 15% to 20% effective 1 July 2021 saw Safaricom absorb the tax on mobile data and pass on the tax on voice and fixed cost to consumers.

“Mobile data revenue grew 6.3% YoY weighed down by price rationalization, absorbed tax from excise duty adjustment on data from August 2021 and a lapping effect of the accelerated growth recorded in H1 FY21 at the onset of the pandemic in Kenya,” the firm disclosed.

Interestingly, Safaricom customers using more than 1GB increased 26.7% YoY to 6.8 million while active 4G devices grew 37.3% YoY to 9.7 million.

During a call with shareholders and analysts, Safaricom CEO Peter Ndegwa also spoke on the situation in Ethiopia, which is locked in political conflict. The firm evacuated some of its employees via commercial flights to Nairobi last week.

Ndegwa stated: “We’re confident we will launch commercial operations in Ethiopia in 2022 even as we assess the situation as it evolves. We hope for a speedy resolution to the prevailing situation.”

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