Against the backdrop of increased innovations, mobile banking partnerships as well as the long awaited bringing of M-Pesa servers home as well controversies to do with data bundles and Karibu post paid Tarriff, Safaricom has posted Ksh 31.9 bn profits after taxes.
The telcos’s Chief Executive Officer (CEO) Bob Collymore said that the company grew its total revenue by 13% to Kshs 163.4bn through focusing on providing quality services that resulted in double digit growth across non-voice service revenue streams. Voice service revenue which now stands at 54% of total revenue grew at 4% while non-voice service revenue which accounts for 42% of total revenue, sustained its growth trajectory with a 27% increase to Kshs 68.8bn driven mainly by Data and MPesa. Devices and other revenue contribute 4% of total revenue.
“Mobile penetration in Kenya stood at 80.6%* with Safaricom recording the largest subscriber share of 67.4%*. Our customer base has grown by 8% to 23.3m while churn rate dropped to 17.3% as a result of efforts centered on retaining and rewarding our loyal customers.”
“Voice service revenue grew 4% to Kshs 87.4bn, this growth was supported by our loyal customer base attracted by a superior network experience, convenient airtime distribution and attractive consumer propositions and promotions such as the ‘Tetemesha’ campaign,” said Collymore.
The company’s messaging revenue increased by 15% to Kshs 15.6bn which represents 10% of its total revenue. This was driven by increased usage from affordable SMS bundles and SMS based promotions such as‘Bonyeza Ushinde’.
“MPesa, now contributing 20% of total revenue, continues to be a significant driving factor in our growth. This was driven by a 14% increase in 30 day active MPesa customers to 13.9m as well as an increase in the average number of transactions per customer. In the year, we expanded our MPesa agent outlets to 85,756 thereby promoting accessability of the service to our customers. Since its launch, the Lipa na MPesa service has enabled cashless merchant payments and facilitated trade between businesses and their customers while improving business efficiency. In March 2015 the service had 49,413 merchants active on a 30 day basis, who received Kshs 11.6bn of payments,” revealed Collymore.
Mobile data revenue grew at 59% driven by an increased uptake of data bundles and a 21% growth in 30 day active mobile data customers to 11.6m. By 31 March 2015 there were 4.3m customers on 3G enabled devices of which 3.4m were smartphones. Fixed data revenue increased by 22% to Kshs 3.1bn on the back of 23% growth in fixed data customers.
“We continue to focus on our ‘Best Network in Kenya’ program with Kshs 33.7bn invested on capital expenditure during the year, our goal being to provide the best customer experience through improving our network quality, capacity and coverage. We have increased the population coverage of our 3G network to 69%, completed the modernization of our 2G network which covers 92% of the population and have connected 30% of our base stations to our fibre,” said the CEO.
An independent drive test to measure key quality metrics such as dropped calls, voice quality and data speeds, these tests confirmed that the network is the best in Kenya and delivers world class data and voice services.
“For another consecutive year, we have delivered robust results and ensured value for our shareholders supported by growth across all our revenue streams. This increase in revenue coupled with cost efficiency has driven the EBITDA margin to 43.6%, a 1.5ppt improvement.
Free cash flow has increased by 21% to Kshs 27.5bn as a result of the strong trading results and positive working capital movements. The National Police security network negatively impacted free cash flow in the year by Kshs1.1bn, and we expect the negative impact to be Kshs 5.9bn in FY16.”
“In light of the strong financial performance in the past year, the Board recommends a dividend of Kshs 0.64 per share – an increase of 36%. Pending approval by shareholders we will pay out a dividend of Kshs 25.64bn, which represents 80% of our net income, for the year ended 31 March 2015; once again, the largest dividend in Kenyan history,” noted Collymore.