Earnings UpdateSafaricom Half-Year Net Profit Up 12.1% to Kes 37 Billion

Safaricom CEO Peter Ndegwa

Safaricom Plc on Wednesday released its unaudited results for the six months ended 30 September 2021 with net profit for the period rising by 12.1% to Kes 37.056 Billion compared to Kes 33.07 Billion posted in a similar period a year ago. Profit before tax was up by 22.1% to Kes 77.4 Billion compared to Kes 63.4 Billion posted as of 30th September 2020.

The company’s total revenue for the period rose by 17.5% to Kes 146.4 Billion as of 30th September 2021 compared to Kes124.5 Billion posted in a similar period in 2020.

The telco’s revenue was mainly driven by service revenue which grew by 16.9% to Kes 138.4 Billion with Mpesa revenues being the main driver of the growth. Mpesa revenue grew significantly by 45.8% year on year with total transaction value jumping 51.5% to Kes 13.7 Trillion while the volume of transactions rose by 42% to Kes 7.3 Billion.

“M-PESA wallet to bank and bank to M-PESA wallet transactions continue to be free and these account for 18.1% of the total value of M-PESA transactions. Chargeable transactions per one month active customers grew 91.9% YoY to 18.1 transactions.” the telco said in a notice.

Mobile data revenue was up slightly by 6.3% as the company said the performance was 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.”

According to the financials, capital expenditure for the six months period ended 30 September 2021 rose by 0.3% to Kes 22.81 Billion.

The telco’s borrowings as of 30th September stood at Kes 77.0 Billion with cash and cash equivalents standing at Kes 26.45 Billion leaving a net debt position of Kes 50.54 Billion.

The company also revealed that they undertook a one-year bridge facility of USD 400 Million to finance the payment of license fees for the telecommunications license awarded to the Safaricom-led consortium by the Government of Ethiopia.

Safaricom Outlook and Dividend

“We are currently seeking to term out the bridge facility through a long-term debt arrangement so as to manage our working capital requirements in the short term and minimize the currency risk for the dollar loan.” the telco noted.

The company’s board did not declare any interim dividend payment.

Safaricom’s share price was slightly higher on Wednesday as investors digested the earnings results. Of great concern to investors was the escalating conflict in Ethiopia and how that will affect the launch of the operations targeted in mid-2022.

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