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Tulihama Kitambo!:Kenyans React As Safaricom Records a Drop in Profits

Telecommunications operator Safaricom has posted a marginal 1.7 per cent drop in its full-year profit to March 31 with net earnings at Ksh.67.5 billion from Ksh.68.7 billion previously.

The dip in profitability is largely attributable to costs related to the operator’s expansion project in Ethiopia.

Total spending by Safaricom in the year or CAPEX for instance hit Ksh.49.8 billion in the year against an earlier guidance of Ksh.39.3 billion.

The Safaricom Ethiopia unit in the period made a net loss of Ksh.2.7 billion with Ksh.5.1 billion in operating costs within the period.

Further, the Ethiopian operations used up Ksh.10.4 billion in capital with no revenues earned in the period as the unit is yet to commence commercial operations.

Despite headwinds in the macroenvironment including foreign exchange volatility and inflation, Safaricom expects to roll out commercial operations within the year.

“We are making progress in establishing a shared network with Ethiotelecom. We aim for the full roll-out of operations within the 2022 calendar year,” said Safaricom Chief Executive Officer Peter Ndegwa.

However, back home, Safaricom has continued its growth momentum driven largely by a higher M-Pesa revenue and sustained growth in mobile data and fixed services.

M-Pesa revenues in the year soared by 30.3 per cent to Ksh.107.7 billion with one month active customers growing by 4.3 per cent to reach 32.8 million persons.

According to Safaricom’s Chief Financial Officer Dilip Pal, new use cases for the mobile money service should sustain the revenue growth momentum.

“Fintech solutions are growing M-Pesa revenues and driving stickiness in the payments ecosystem,” he said.

Mobile data recorded an 8.1 per cent growth year over year in the period, fixed enterprise service was up by 16.9 per cent while growth for fibre to the home (FTTH) business stood at 20.6 per cent.

Average data usage per customer stood at 20.3 gigabytes recording a 60.5 per cent growth year over year with 11 million connected 4G devices.

The rise in mobile data was against a hike in excise duty on internet services from 15 to 20 per cent in July of 2021.

The board of Safaricom has recommended the payment of a final dividend of 75 cents per share for a combined payout of Ksh.30 billion.

This takes Safaricom’s total dividend payment for the period to Ksh.1.39 per share or a total of Ksh.55.7 billion.

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