Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Safaricom Reports Strong Growth in Fiscal First Half

Article Image
Safaricom has continued to grow its business at a fast pace during the first six months of its current financial year (to the end of September), with the Kenyan operator reporting growth in customer numbers, revenues, margins, traffic and network coverage.

The operator added 450,000 new customers, compared with a year earlier, to take its total to 29.94 million, of which more than 25 million were active users (using a service within the past month). Monthly average revenue per customer (ARPU) increased by 5.4% to KES 662.51 (US$6.53).

Kenya's market leader reported a 7.4% year-on-year increase in total revenues to 122.84 billion Kenyan shillings ($1.21 billion) for the six-month period ending September 30, 2018. As the table below shows, mobile data revenues grew by 10.8% and income from the use of its mobile finance service M-PESA grew by 18.2%.

Its earnings before interest and tax (EBIT) grew by almost 19% to KES44.6 billion ($439 million), while net income was up by more than 20% to KES31.5 billion ($310 million).

The operator has continued to invest in its mobile network coverage, boosting its number of 4G basestations by 62% to 2,353 -- the operator says it now boasts 53% 4G service coverage -- and its 3G basestations by 21% to 4,737. CEO Bob Collymore noted that Safaricom had invested KES17 billion ($167 million) during the six-month period "driven by increased network roll out and acceleration of broadband and fiber deployment."

Table 1: Safaricom Fiscal 2019 H1 Key Numbers

KES billions IAS 18 HY 19 IAS 18 HY 18 IAS 18 change %
Voice revenue 48.03 47.35 1.40%
M-PESA revenue 35.52 30.05 18.20%
Messaging revenue 8.81 8.92 -1.20%
Mobile data revenue 19.45 17.55 10.80%
Fixed service revenue 3.91 3.23 21.00%
Other service revenue 2.49 2.63 -5.30%
Service Revenue 118.21 109.73 7.70%
Handset revenue and other revenue 4.33 4.49 -3.50%
Construction revenue 0.3 0.2 48.70%
Total Revenue 122.84 114.43 7.40%
Operating costs -25.82 -24.13 7.00%
EBITDA 62.12 54.27 14.50%
EBITDA margin %* 50.60% 47.40% 3.2ppt
Depreciation & amortization -17.56 -16.74 4.90%
EBIT 44.56 37.53 18.70%
EBIT Margin %* 36.30% 32.80% 3.5ppt
Net Income 31.5 26.2 20.20%
Net Income %* 25.70% 22.90% 2.8ppt
Earnings per share 0.79 0.65 20.20%
*All margins are calculated on total revenue (excluding construction revenue) plus other income

The numbers impressed investors, as Safaricom's share price gained more than 4.2% on the Nairobi exchange Friday morning to KES24.50. But there are concerns for the company and its investors on the horizon, as a report from Reuters noted that new tax pressures were expected to impact on the company's earnings.

Collymore and his team are doing what they can to offset the new tax burden, including a shift in its operational processes. "We have embraced the agile way of working. This approach is helping us enhance efficiencies and innovate faster in order to meet rapidly changing customer needs. The agile approach is also enabling our business to adapt to a dynamic operating environment, which is at the moment characterized by increased taxation, increased competition and continued uncertainty in the regulatory space, therefore allowing us to identify sustainable growth opportunities and maintain our full-year guidance," said the CEO.

Safaricom CEO, Bob Collymore speaks during the Safaricom half year results announcement at Michael Joseph Center.
Safaricom CEO, Bob Collymore speaks during the Safaricom half year results announcement at Michael Joseph Center.

In its review of its fiscal first-half performance, the operator focused on three key areas of growth -- M-PESA, mobile data and fixed line services, which together "contributed 95% of total service revenue growth. During the first six months of the year, M-PESA was the main driver of growth, contributing 64% of service revenue growth, further accelerating displacement of traditional voice and messaging services." It added: "Mobile data and fixed data contributed 30% of total service revenue growth."

The operator seems particularly bullish about its investments in fiber-to-the-home (FTTH) broadband. "We maintained great momentum in our fixed service business, connecting an additional 30k homes in H1 and more than doubling our coverage YoY. Though a relatively new line of business, fixed data now contributes 3.3% to total service revenue and grew at 21% YoY in the period," the operator noted in its earnings release.

— Ray Le Maistre, Editor-in-Chief, Light Reading for Connecting Africa.

Innovation hub


Interview: Qualcomm execs on mentorship for African startups

Qualcomm Technology VP for Engineering, Sudeepto Roy, and Elizabeth Migwalla, VP for Government Affairs, join Connecting Africa for a video interview about Qualcomm's Make in Africa Mentorship Program.


Hot startup of the month: Pan-African fintech KamaPay

This month's hot startup is pan-African fintech KamaPay, which helps individuals and businesses make cross-border payments on the continent.

More Innovation hub

Latest video

More videos

Sponsored video

More videos

Industry announcements

More Industry announcements

Flash poll

All polls

Africa Tech Perspectives


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.


Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.


Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Upcoming events

London Tech Week
June 13-16, 2023
Queen Elizabeth II Centre, Broad Sanctuary, London SW1P 3EE
Cybertech Africa 2023
August 1-2, 2023
Kigali Convention Center, Kigali, Rwanda
Africa Tech Festival, Home of AfricaCom and AfricaTech
November 13-16, 2023
CTICC, Cape Town
More Upcoming events

Guest Perspectives


Omdia View: February 2023

By Omdia Analysts

In February 2023 key events in the Middle East and Africa included a major Internet project for Africa's underserved by Liquid Intelligent Technologies and Microsoft as well as a 5G launch in Tanzania – that and more in this month's Omdia View.


Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up