Safaricom has announced a Ksh 73.66 billion profit after tax for the financial year ending March 2020 while its service revenue grew 4.8% to KShs 251.22bn.
The firm says the grow was driven by sustained customer growth, mobile data growth returning to double-digit along with M-PESA and fixed data growth.
Though the growth was partially offset by COVID-19 and a contraction of betting industry, Safaricom’s Service Revenue increased 5.9%. Customers in the year increased 12.2% to 35.6mn as at 31 March 2020. M-PESA one-month active customers increased 10.0% to 24.9mn while mobile data one-month active chargeable customers increased 10.2% YoY to 19.6mn.
Safaricom’s voice service (incoming and outgoing) revenue shrunk by 1.4% to KES 94.45bn while its M-PESA revenue grew by 12.6% to KES 84.44bn. Messaging revenue declined by 12.3% to KES 17.19bn while Fixed service revenue increased by 10.7% to KES 8.97bn.
Safaricom says its one-month active overall customer base increased by 9.5% to 28.63mn while one month active M-PESA customers increased 10.0% to 24.91mn while one month active chargeable mobile data customers increased 10.2% to 19.62mn.
“In FY20, my aim was to ensure the organization focused more on the customer, regaining both the Customer Trust and Market Share. We have stayed the course, given customers more value, and put the consumer first by delivering relevant products and services. As a result, the business has delivered exceptionally well, outperforming the guidance, in the process generating solid returns to our shareholders,” said Michael Joseph, Outgoing CEO.
Recently, Safaricom completed the acquisition of the M-PESA brand from Vodafone Plc through a JV with Vodacom. The firm today also launched an initiative to sell its customers 4G smartphones on an installment payment plan.
Other key growth indicators include:
• Voice service (incoming and outgoing) revenue shrunk by 1.4% to KES 94.45bn.
• M-PESA revenue grew by 12.6% to KES 84.44bn.
• Mobile data revenue increased by 12.1% to KES 40.67bn.
• Messaging revenue declined by 12.3% to KES 17.19bn.
• Fixed service revenue increased by 10.7% to KES 8.97bn.
• One month active overall customer base increased by 9.5% to 28.63mn.
• One month active M-PESA customers increased 10.0% to 24.91mn.
• One month active chargeable mobile data customers increased 10.2% to 19.62mn.
• Free Cash Flow up 11.4% to KES 70.27bn.
1. Key performance indicators
| FY20 | FY19 | FY19 | % Change | |
| Key Performance Indicators | IFRS 15 Reported | IFRS 15 Restated | IFRS 15 Reported | IFRS15/IAS17 |
| Total customers | 35.61 | 31.73 | 31.85 | 12.2% |
| 90-day active total customer ARPU | 614.58 | 659.34 | 658.30 | (6.8%) |
| One month active customers (m) | 28.63 | 26.15 | 26.73 | 9.5% |
| One month active customer ARPU | 758.70 | 788.94 | 773.00 | (3.8%) |
| Churn (%) | 25.22% | 23.54% | 23.45% | (1.7ppts) |
| Voice | ||||
| One month active voice customers (m) | 25.75 | 24.16 | 24.24 | 6.6% |
| One month active voice customer ARPU | 313.46 | 340.26 | 339.58 | (7.9%) |
| M-PESA | ||||
| Number of M-PESA agents | 173,259 | 167,083 | 167,083 | 3.7% |
| One month active M-PESA customers (m) | 24.91 | 22.64 | 22.64 | 10.0% |
| One month active M-PESA ARPU | 294.68 | 289.95 | 289.95 | 1.6% |
| Mobile Data | ||||
| One month active mobile data customers (m) | 21.99 | 19.26 | 18.83 | 14.2% |
| One month active chargeable mobile data customers (m) | 19.62 | 17.81 | 15.92 | 10.2% |
| One month active chargeable mobile data ARPU | 179.70 | 170.98 | 175.66 | 5.1% |
| Messaging | ||||
| One month active messaging customers (m) | 21.40 | 20.34 | 17.92 | 5.2% |
| One month active messaging customer ARPU | 67.80 | 80.83 | 81.67 | (16.1%) |
| Base Stations | ||||
| 2G base stations | 5,314 | 4,949 | 4,949 | 7.4% |
| 3G base stations | 5,275 | 4,907 | 4,907 | 7.5% |
| 4G base stations | 4,342 | 2,791 | 2,791 | 55.6% |
2. Condensed consolidated statement of profit or loss and other comprehensive income
| FY20 | FY20 | FY19 | % Change | IFRS 16 | |
| KShs Bn | IFRS 15/16 | IFRS15/IAS17 | IFRS15/IAS17 | IFRS15/IAS17 | Impact |
| Voice revenue | 94.45 | 94.45 | 95.80 | (1.4%) | 0.00 |
| M-PESA revenue | 84.44 | 84.44 | 74.99 | 12.6% | 0.00 |
| Messaging revenue | 17.19 | 17.19 | 19.61 | (12.3%) | 0.00 |
| Mobile data revenue | 40.67 | 40.67 | 36.27 | 12.1% | 0.00 |
| Fixed service revenue | 8.97 | 8.97 | 8.10 | 10.7% | 0.00 |
| Other service revenue | 5.50 | 5.50 | 5.00 | 10.0% | 0.00 |
| Service Revenue | 251.22 | 251.22 | 239.77 | 4.8% | 0.00 |
| Handset revenue and other revenue | 10.48 | 10.48 | 9.45 | 10.9% | 0.00 |
| Construction revenue | 0.58 | 0.58 | 0.60 | (3.3%) | 0.00 |
| Other Income | 0.28 | 0.28 | 0.46 | (39.1%) | 0.00 |
| Total Revenue | 262.56 | 262.56 | 250.28 | 4.9% | 0.00 |
| Direct Costs | (74.70) | (74.70) | (71.80) | 4.0% | 0.00 |
| Provision for expected credit loss (ECL) on receivables | (1.67) | (1.67) | 0.01 | <100.0% | 0.00 |
| Construction costs | (0.58) | (0.58) | (0.60) | (3.3%) | 0.00 |
| Contribution margin | 185.61 | 185.61 | 177.89 | 4.3% | 0.00 |
| Contribution margin % | 70.8% | 70.8% | 71.2% | (0.4ppts) | 0.0ppts |
| Operating costs | (47.56) | (50.97) | (53.59) | (4.9%) | 3.41 |
| Operating costs % total revenue | 18.2% | 19.5% | 21.5% | (2.0ppts) | (1.3ppts) |
| EBITDA (Earnings Before Interest, Tax, | |||||
| Depreciation and Amortisation) | 138.04 | 134.63 | 124.30 | 8.3% | 3.41 |
| EBITDA margin % | 52.7% | 51.4% | 49.8% | 1.6ppts | 1.3ppts |
| Depreciation, impairment & amortisation | (36.55) | (33.62) | (35.33) | (4.8%) | (2.92) |
| EBIT (Earnings before Interest and Tax) | 101.49 | 101.01 | 88.97 | 13.5% | 0.48 |
| EBIT Margin % | 38.7% | 38.6% | 35.6% | 3.0ppts | 0.1% |
| Net finance income | 0.92 | 2.56 | 2.24 | 14.3% | (1.64) |
| Share of associate profit/(loss) | 0.06 | 0.06 | 0.01 | >100.0% | 0.00 |
| Share of profit of Joint Venture (M-PESA Global Services | |||||
| Limited) | 3.30 | 3.30 | 0.00 | >100.0% | 0.00 |
| Profit before income tax | 105.77 | 106.93 | 91.22 | 17.2% | (1.15) |
| Income tax expense | (32.12) | (32.23) | (28.73) | 12.2% | 0.11 |
| Profit after tax | 73.66 | 74.70 | 62.49 | 19.5% | (1.04) |
| Other comprehensive income | 0.00 | 0.00 | 0.00 | 0.00% | 0.00 |
| Profit and total comprehensive income for | |||||
| the year* | 73.66 | 74.70 | 62.49 | 19.5% | (1.04) |
| Profit and total comprehensive income for the | |||||
| year % | 28.1% | 28.5% | 25.0% | 3.5ppts | (0.4ppts) |
| Basic and diluted earnings per share (EPS)* | 1.84 | 1.86 | 1.56 | 19.5% | (0.02) |
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