Telecommunication company Safaricom has reported a reduced Ksh. 68B profit after tax for the year ended 31st march 2021. This is a reduction from the Ksh. 74 billion that the company reported in the previous period.

Safaricom’s service revenue recorded a marginal decline of 0.3% to close at Ksh. 250.35 billion driven by double-digit growth in mobile data business.  This business line grew by 11.5% to Ksh. 44.79 billion compared to the previous year.

M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1% drop YoY to Ksh. 82. 64 billion and voice dropping by 4.6% to register revenue of Ksh. 82.55 billion.

Safaricom has recorded a growth in the financial year ending March 2021 despite the tough economic conditions triggered by the COVID-19 pandemic. During this period, Safaricom enabled Kenyans to reduce the impact of the pandemic by waiving fees for transactions below a Ksh. 1,000. This saw free transactions worth Ksh. 4.4 billion processed.

“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.

Profit Before Interest and Tax hit Ksh. 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.

Speaking 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 Ksh. 105 – Ksh. 108 billion for Earnings Before Interest and Tax and Capital Expenditure guidance in the range of Ksh. 40 – Ksh. 43 billion.”

Listed below are the key highlights from the report

  • 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 Ksh. 68.68 billion
  • Free Cash Flow down 8.2% YoY to Ksh. 64.52 billion
  • Service revenue contracted by 0.3% to Ksh. 250.35 billion
  • Voice service (outgoing) revenue reduced by 4.6% YoY to Ksh. 82.55 billion
  • M-PESA revenue dropped by 2.1% YoY to Ksh. 82.65 billion
  • Mobile data revenue increased by 11.5% YoY to Ksh. 44,79 billion
  • Messaging revenue declined by 11.7% YoY to Ksh. 13.60 billion
  • The total one-month active customer base increased by 9.9% to Ksh. 31.45 million
  • One month active M-PESA customers increased 13.6% to Ksh. 28.31 million
  • One month active mobile data customers increased 8.1% to Ksh. 23.77 million