Safaricom net profit jumps to Sh34.2b on increased lending

Safaricom Chief Financial Officer Dilip Pal. [Wilberforce Okwiri, Standard]

Leading telecommunications service provider Safaricom Group posted Sh34.2 billion in profit after tax for the first half of this year on the back of growth in its lending and mobile data divisions. 

According to the company’s half-year results released yesterday, service revenue stood at Sh157 billion, representing an 8.5 per cent growth compared to last year. 

Revenue from M-Pesa stood at Sh66 billion, a 16 per cent increase compared to last year pushed by personal and business payments. 

Earnings from voice and data stood at Sh38.6 billion and Sh5.7 billion respectively, with the telco’s active customers rising to 33.27 million. 

According to the company, high inflation, currency depreciation and tight liquidity slowed down GDP growth, dampening the business environment. 

“We navigated through economic headwinds, including high inflation, rising energy costs, weakening Kenyan shilling and also high-interest rates, and this of course affected our financial performance,” said Safaricom Chief Financial Officer Dilip Pal. 

However, the reintroduction of charges on transactions between bank and M-Pesa earlier this year helped grow earnings for the firm’s mobile money business. 

Mobile data revenue saw a 17.7 per cent increase to Sh30 billion, while fixed line and wholesale revenues grew 9.1 per cent to hit Sh7.3 billion and Sh30 billion respectively. 

The value of loans disbursed on Fuliza stood at Sh419 billion, a 32 per cent increase from the Sh315 billion reported last year.

The value of loans through M-Shwari and KCB M-Pesa went up 10 per cent and 6.7 per cent respectively to stand at Sh52.3 billion and Sh23.1 billion.   

“We have had robust engagements with the government and our regulators on various industry-related matters largely focused on the digitisation of the economy and reducing the number of digitally excluded people,” said Safaricom CEO Peter Ndegwa. 

“In Ethiopia, we are working closely with the regulators as we expand our coverage and roll out of our products and services.” 

Safaricom Ethiopia reported Sh1.9 billion service revenues, Sh1.3 billion from mobile data and Sh7.2 billion from M-Pesa even as the firm said its mobile payments division in the country is still in the early days. 

“We had a successful launch of M-Pesa and registered M-Pesa customers now stand at 1.2 million, with 67 per cent of them being active,” said Mr Dilip Pal. 

“We have also onboarded 22,700 M-Pesa agents with the volume and value transacted at 2.0 million and Sh43.7 billion respectively.” 

The company also reported significant growth in the fixed service and wholesale revenue, with customers on its Fibre Home product in Kenya standing at 223,190, a 28 per cent increase compared to last year.