Safaricom has registered its first revenue from its Ethiopia operations in its first reporting cycle since 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 net income grew by 0.6% YoY supported by the 4.6% growth in revenue.
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 launch of operations early last month. Most importantly we are enthusiatic on 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 the mobile money license which will boost commercial efforts, with a greater focus of driving financial inclusion and digital acceleration for the people of Ethiopia.
During this period, Safaricom rallyied 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 organisations valued at over KShs 32 million.
“We have reviewed our value propositions considerably driving more value for the same price points, through effective use of Data and Analytics to advance personalised 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 first half of the financial year and remain committed in 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, 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 to children below 18 years as well as the anticipated return to charging on banking transactions.