Safaricom, Kenya’s leading mobile operator, made a record Ksh31.9 billion profit after tax for the full year ending March 31, 2015, breaking its own record and setting an unassailable lead in the region’s corporate finance.
The 38% growth in profitability from the previous year’s Ksh23 billion came mostly from non-voice services such as M-Pesa, SMS and data.
Safaricom shareholders will be the biggest beneficiaries, after the board increased dividend by matching profit growth. It recommended a dividend of Ksh0.64 per share, an increase of 36% from the previous year. This translates to a cool Ksh25.64 billion for shareholders, the largest dividend payout in Kenya’s history.
Safaricom’s share price on Wednesday rose to an all-time high of Sh17.90 with investors expecting record profits to be announced and is expected to attract more takers with the huge dividend announcement which will drive up the price. Analysts see the stock edging past the Ksh20 mark.
Meanwhile, total revenue increased 13% to Ksh163.4 billion, with the mobile giant’s customer base growing 8% to 23.3 million. Non-voice revenue increased 27 % to Ksh68.8 billion, accounting for 42 per cent of total revenue.
Okoa Jahazi, the emergency airtime top-up rose 32% while voice income grew marginally by 4% to Ksh87.4 billion. “M-Pesa, now contributing 20 per cent of total revenue, continues to be a significant driving factor in our growth,” CEO Bob Collymore said. “Mobile data revenue grew at an impressive 59 per cent, driven by an increased uptake of affordable data bundles and a 21% growth in 30-day active data customers.”
The good performance has earned Mr Collymore confidence and the firm’s chairman, Nicholas Ng’ang’a, announced that the board had extended Collymore’s contract for two years.
The firm used the event to launch Safaricom’s home broadband solution, “a set-top box that brings the 3G and 4G network into the home, and distributes the superfast connectivity via wi-fi to any device” as well as Kenyan digital free-to-air TV channels to the customers’ TV.
Dubbed ‘The Big Box’, it is expected to drive growth in data with the mobile giant planning to introduce video-on-demand and other content “in the coming year”.
