PROFIT

Safaricom records Sh35 billion profit in six months

In Summary

• Revenues from calls declined by 1.4 per cent to Sh46.87billiion.

• The telecommunication company announced Sh31.5 billion in net profit for a similar period in 2018.

Safaricom house.
Safaricom house.
Image: FILE

Safaricom PLC has announced a 14.4 per cent increase in net profit to Sh35.65 billion for the last six months.

The growth has been attributed to rise in revenues accrued especially from Mpesa and fixed data.

The telecommunication company announced Sh31.5 billion in net profit for a similar period in 2018.

The service revenue growth to Sh124.32billion while Mpesa revenues increased by 18.2 per cent to Sh41.97 billion.

 
 

Mobile data income also here by 4 per cent to Sh19.7 billion. Revenues from calls declined by 1.4 per cent to Sh46.87billiion.

Messaging revenue declined by 11 per cent to Sh 8.60billion.

Speaking during the announcement of the results, Acting  Chief Executive Officer Michael Joseph on Friday said the company will focus on investment and improving quality of service to increase their market share.

" We will sustain the momentum of investing in the quality of our service and growth in our portfolio including deeper penetration of M-PESA into the economy, cloud and IoT solutions, our agricultural and e-commerce platforms, regional expansion and new business opportunities," Michael Josepg said.

In May, the company announced a loss of Sh300 million in mobile data revenue in the second half of the year ending March 31, 2019 due to an increase in taxes.

The telco's financial results showed revenue from mobile data dropped to Sh19.2 billion compared to Sh19.5 billion in the first half of the year. 

The firm's chief financial officer, Sateesh Kamath attributed the drop to the increased excise duty on airtime from 10 to 15 per cent.

While the half-year revenue recorded a drop, year on year revenue grew at a slower pace of 6.4 per cent to Sh38.7 billion from Sh36.3 billion in 2017.

“..we decided to absorb the indirect taxes and that had an impact on our mobile data growth for the year...the 6.4 per cent growth we had on our mobile data would have been more like 9.5 per cent if we didn’t have to absorb this taxes,” Kamath said.

In October 2018, Safaricom announced it had increased the price of voice calls, data and SMS as it sought to pass on the increased tax to consumers.

The firm raised the cost of calls by 30 cents, and SMS by 10 cents, after the tax rose to 15 per cent, in addition to the prevailing 16 per cent Value Added Tax (VAT) on mobile service.

Despite the increased price for data, the number of mobile data customers increased to 18.8 million from 17.7 million in 2017.