NAIROBI: Safaricom users spent Sh45.19 billion talking in the last six months, according to the telecommunication company’s half year financial results released yesterday. Although the voice segment realised the lowest growth margin of 3.48 per cent among the various services offered by Safaricom, it still accounted for 53.22 per cent of the Sh84.91 billion in network service revenues despite competition from messaging platforms including Twitter, Facebook and WhatsApp, the company said.
Net profit between April and September increased by 22.91 per cent to Sh18.08 billion compared to Sh14.71 billion posted in the same period of last year, helped by non-voice earnings.
Chief executive Bob Collymore raised the company’s full-year net profit outlook to Sh36.5 billion from an earlier forecast of Sh35.5 billion previously, shrugging off concerns of a slower growth in the economy than earlier projected.
This will be Sh4.6 billion more than Sh31.9 billion it posted last financial year through March. Collymore said jitters around high interest rates and weakening of the shilling against the dollar are unlikely to take “steam out of telephony services”.
A mobile phone has become an essential item for customers, he said, expressing confidence in the steps being taken by the government to deal with challenges that may slowdown growth of the national wealth.
“I believe we are seeing very strong fiscal management in the country, currency has stabilised…[and] so I would caution judging the sentiment in the country by the front page of the media,” he told an investor briefing in Nairobi yesterday.
Total income in the review period increased to Sh97.22 billion from Sh79.34 billion – a 22.54 per cent growth. This was boosted largely by Sh8.44 billion earnings from construction of the Sh14.9 billion National Police Security Network in Nairobi and Mombasa, a revenue stream that was absent a year ago as the deal was inked last November.
This means Safaricom earned an average Sh531.26 million daily in the six-month period of this year. “We measure our results not by the profit we make, but by the difference we make [in the society],” Collymore said.
Revenues from network services rose by 12.31 per cent to Sh84.91 billion. Mobile data’s earnings grew the most at 40.92 per cent to Sh9.16 billion, followed by M-Pesa’s 24.83 per cent to Sh19.35 billion.
Messaging services earned Safaricom Sh7.98 billion –11.29 per cent more than a year ago – while fixed service revenues climbed by 24.12 per cent to Sh1.86 billion. About Sh3.87 billion came in from other sources largely sale of handsets at the firm’s outlets through partnerships with phone makers such as Samsung, Huawei and Techno.
Total expenses accounted for 22.53 per cent of the total revenue after direct costs rose 3.8 per cent to Sh30.02 billion, while the construction cost for the security network system was Sh8.44 billion.
Chief financial officer John Tombleson said payments to suppliers of the security system led to a 38.50 per cent drop in net cash flow to Sh9.52 billion from Sh15.48 a year before. Safaricom’s shares trading on the Nairobi Securities Exchange closed 4.90 per cent stronger day-on-day to Sh15 a piece.
