Safaricom PLC, Kenya’s leading telecommunications company, has reported a 21.7% increase in net earnings for the first half of the year, with group service revenue rising by 14% to reach a record Sh181.4 billion.
In its financial results released on Thursday, the Nairobi-listed firm announced a comprehensive net profit of Sh36.7 billion for the period. However, the Kenyan unit alone posted a net profit of Sh47.5 billion, reflecting a growth of 14.1%.
The group’s overall earnings were somewhat dampened by a 17.7% decline in net earnings from its Ethiopian operations, which dropped to Sh28.1 billion. This downturn was linked to the devaluation of Ethiopia’s currency, which has depreciated by 30% against the US dollar following the government’s decision to relax currency restrictions to secure a $10.7 billion loan from the IMF and World Bank.
The strong performance in Kenya was driven by double-digit growth, with local service revenue increasing by 12.9% to Sh177 billion, resulting in an 18% rise in EBIT and net income, which reached Sh79.2 billion.
“We are proud of the value we continue to create for our customers through technology, and we will keep expanding our core business while exploring new services through innovation,” said Safaricom CEO Peter Ndegwa.
According to Chief Financial Officer Dilip Pal, M-Pesa was a major contributor, accounting for 50% of the company’s total service revenue, which grew by 13.1% to Sh179.9 billion. The mobile money platform itself saw a 16.6% rise in earnings, bringing in Sh77.24 billion.
In Kenya, M-Pesa’s revenue grew by 16.6% to Sh77.22 billion, driven by a 13.1% increase in Average Revenue Per User (ARPU) to Sh389.27. Chargeable transactions per one-month active customer grew by 25.6% to 37.37, while the number of one-month active customers rose by 4.1% to 33.46 million. Additionally, the number of M-Pesa agents grew by 2.4% to 266,007.
“We’ve seen strong growth in new products like Pochi la Biashara and merchant overdraft products as we continue to support SMEs,” noted Ndegwa. The number of Pochi tills more than doubled to 869,020, while the customer base for Fuliza (merchant overdrafts) grew by 72.9% to 52,270.
M-Pesa transactions in total grew 10.7% in value to Sh20.85 trillion, with transaction volumes increasing by 30.6% to 17.09 billion. M-Pesa now accounts for 43.5% of Safaricom’s total service revenue.
In Ethiopia, M-Pesa generated Sh24.4 million in revenue with 8.31 million registered customers, while the number of active M-Pesa agents reached 3,160, and Lipa na M-Pesa merchants rose to 6,600. Safaricom continues to expand use cases for M-Pesa, with transaction volumes and values reaching 86.5 million and Sh10.94 billion, respectively.
The company’s voice revenue grew by 4.5% to Sh40.87 billion, and mobile data revenue increased by 21.5% to Sh37.6 billion. Revenue from fixed internet services rose by 13.1% to Sh8.3 billion, while SMS revenue grew by 8% to Sh6.3 billion.
In Kenya, mobile data revenue saw a 20.2% increase to Sh35.6 billion, driven by a 13.5% rise in ARPU to Sh263.25. One-month active mobile data customers increased by 10.5% to 28.83 million, with data usage per chargeable subscriber growing by 9.8% to 4.12GB.
The company’s total customer base grew by 7.8% year-on-year to 52.01 million, with one-month active customers rising by 10.8% to 39.75 million. As of June 2024, Safaricom maintained a dominant market share of 65.4% in Kenya’s mobile network sector.
Safaricom’s expansion into Ethiopia has also been notable, with the firm now covering 46% of the country’s population, or roughly 52 million people, just two years after entering the market. Safaricom’s Group Chairman, Adil Khawaja, stated that the company is on track to meet its license obligation of covering 55% of Ethiopia’s population by June 2025.
The Kenyan firm made headlines in October 2022 when it became the first private operator to enter Ethiopia’s telecom market after securing a license with a bid worth $850 million (approximately Sh110 billion).
Despite the challenges posed by currency devaluation in Ethiopia, the company’s operations in the country showed growth across all product categories, contributing positively to its overall performance.
