Safaricom (NSE: SCOM) has recorded a flat growth in the financial year ending March 2021 despite the tough economic conditions triggered by the covid19 pandemic. During this period, Safaricom enabled Kenyans to reduce the impact of the pandemic by waiving fees for transactions below a KES 1,000, which saw free transactions worth KES 4.4 billion processed.
Service revenue recorded a marginal decline of 0.3% to close at KES 250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5% YoY to KES 44.79 billion. M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1% drop YoY to KES 82. 64 billion and voice dropping by 4.6% to register revenue of Kshs 82.55 billion. “We remained resilient in a disruptive year, demonstrating strong operational capacity, diligence and commitment in supporting the country, our customers and shareholders through this uncertain time. Our immediate focus in the year has been to ensure that network capacity, operations and financial services are prioritized to limit disruptions,” said Peter Ndegwa, Safaricom CEO.
Earnings/profit Before Interest and Tax delivering ahead of guidance at KES 96.16 billion. M-PESA accounted for 33.0% of the total service revenue down from 33.6% last year, impacted by the waiver of the Peer-to-Peer (P2P) transactions fees. To support Micro and Small Medium Enterprises (MSMEs), the company introduced the
Pochi la Biashara, M-PESA Business App, Bill Manager, Merchant Transacting till and Self On-Boarding process. Safaricom has also announced that the consumer M-PESA App will be launched in quarter one of the current financial year.
C2 – Safaricom Internal Commenting on the future of the business, Ndegwa noted: “Despite a tough financial year, the company is committed to investing in the business and maintaining a consistent dividend payout ratio in line with our dividend policy. Our guidance for the Financial year 2022 is at the range of KES 105 – 108 billion for Earnings Before Interest and Tax and Capital Expenditure guidance in the range of KES 40-43 billion.”
KEY HIGHLIGHTS
5.3% YoY decline in EBIT (Earnings before Interest and Tax) to KES 96.16bn
with an EBIT margin of 36.5%, down 2.2ppts YoY.
Net Income reduced by 6.8% YoY to KES 68.68bn.
Free Cash Flow down 8.2% YoY to KES 64.52bn.
Service revenue contracted by 0.3% to KES 250.35bn.
Voice service (outgoing) revenue reduced by 4.6% YoY to KES 82.55bn.
M-PESA revenue dropped by 2.1% YoY to KES 82.65bn.
Mobile data revenue increased by 11.5% YoY to KES 44,79bn.
Messaging revenue declined by 11.7% YoY to KES 13.60bn.
The total one-month active customer base increased by 9.9% to 31.45Mn.
One month active M-PESA customers increased 13.6% to 28.31mn.
One month active mobile data customers increased 8.1% to 23.77mn.
About Safaricom
Safaricom transforms lives.
We provide voice, data, financial services and enterprise solutions for a range of
customers, small businesses and government, using a variety of platforms. We delight
over 39.9 million customers, providing over 200,000 touchpoints for our customers and
offering over 100 different products under our portfolio.
C2 – Safaricom Internal
Listed on the Nairobi Securities Exchange and with annual revenues in excess of KES
200 Billion, Safaricom invested KES 35 billion in infrastructure this year, providing over
95% of Kenya’s population with 3G coverage, over 94% of the population with 4G
coverage, and providing 2G coverage to 96% of Kenyans. Safaricom has harnessed its
proprietary fibre infrastructure to build a dedicated enterprise business, which provides
managed I.T. services to clients in the East African region.
Safaricom pioneered commercial mobile money transfer globally through M-PESA, the
most successful service of its kind anywhere in the world. Launched in March 2007, M-
PESA now has over 28 million active customers and over 247,000 M-PESA Agent
outlets countrywide.