Safaricom (NSE: SCOM) has registered its first revenue from its Ethiopia operations in its first reporting cycle since the launch of its commercial operations.
Safaricom Ethiopia Service Revenue for the period ended September 30th, 2022 was KShs 9.1M while Total Revenue including handsets sales was KShs 98.3 million. Safaricom Kenya’s net income grew by 0.6% YoY supported by the 4.6% growth in revenue.
Safaricom Telecommunications Ethiopia officially launched
Safaricom Kenya delivered a solid set of results despite the prevailing macroeconomic challenges leading to a tough operating environment in Kenya and elevated pressure on consumer spending.
“We are pleased with the commercial progress made in Ethiopia since the launching of operations early last month. Most importantly we are enthusiastic about the growth opportunity in Ethiopia, with over 740,000 customers so far and 20,000 new customers joining the network daily. We are also encouraged by data and voice usage levels with 711 MBs average usage per active data customers and 30 Minutes of Use per active voice customers for the month of October” Peter Ndegwa, Safaricom PLC CEO.
Mr. Ndegwa noted that Safaricom had invested over USD 598million in Ethiopia operations and was encouraged by the early uptake of our services, great customer feedback on the quality of their data experience, and the revenue contribution by the Ethiopia unit. The Government of Ethiopia has also committed to award Safaricom with a mobile money license which will boost commercial efforts, with a greater focus on driving financial inclusion and digital acceleration for the people of Ethiopia.
During this period, Safaricom rallied a private sector response to the prolonged drought in Kenya through the Pamoja Tuungane campaign and contributed KShs 100 million through Safaricom Foundation to help Kenyans affected by drought in 23 counties. The campaign also received donations in Bonga points, cash, and in-kind from various organizations valued at over KShs 32 million.
C2 – Safaricom Internal
“We have reviewed our value propositions considerably driving more value for the same price points, through effective use of Data and Analytics to advance personalized offerings to customers. For instance, through our customer value management (CVM) tool, our data prices have gone down by 31.7% percent while usage has gone up by 69.8%,” said Mr. Ndegwa.
Voice service revenue dropped by 3.8% to KShs 39.88 Billion; Mobile Data revenue grew by 11.3% to KShs 26.30 Billion, while M-PESA revenue grew by 8.7% to KShs 56.86 Billion.
“Given the impact of the Mobile Termination Rates from KShs 0.99 to KShs 0.58, a slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones and a failed rain season leading to more economic hardship for the country, Safaricom has done very well to deliver solid revenue growth and a net income that is within the expected range,” said Mr Ndegwa.
While economic, regulatory and tax headwinds will continue impacting revenue performance, Safaricom anticipates increased usage and customer growth to drive half-two momentum.
“The board is pleased with the results delivered for the first half of the financial year and remains committed to protecting shareholder wealth, by ensuring management puts our customers first, continuously innovating to offer relevant products, services, and solutions to meet their needs. We remain mindful of the sustained consumer wallet pressure with rising inflation, the highest in five years at 9.2% in September 2022, and high commodity prices,” notes John Ngumi, Chairman, of Safaricom Board of Directors.
Safaricom will soon be launching new products and services in the second half of the financial year, including the M-PESA Go product to enhance child safety and sound financial knowledge for children below 18 years as well as the anticipated return to charging on banking transactions.
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KEY HIGHLIGHTS
- Service Revenue +4.6% to KShs 144.83Bn
- Voice revenue -3.8% to KShs 39.88Bn
- M-PESA revenue +8.7% to KShs 56.86Bn.
- Mobile data revenue +11.3% to KShs 26.30Bn.
- Total customer base +2.9% to 43.17Mn for Kenya, 180k for Safaricom Ethiopia • One-month active M-PESA customers +8.6% to 31.17Mn.
- One-month active mobile data customers +4.8% to 25.20Mn
C2 – Safaricom Internal
Solid financial performance
- Safaricom Kenya Earnings Before Interest and Tax (EBIT), +0.3% to KShs 58.40Bn, +0.8% excluding the impact of Mobile Termination Rates (MTR) changes • Safaricom Plc Group EBIT -11.5% to KSHS 51.25Bn and -11.1% excluding the impact of MTR changes
Net Income
- Safaricom Plc Kenya +0.6% to KShs 37.55Bn
2. Safaricom Plc Group excluding minority interest, -10.0% to KShs 33.47Bn
