Safaricom Earnings To Rise By 7-12 Percent

By Duncan Miriri

NAIROBI (Reuters) – Kenya’s largest telecoms operator Safaricom expects its earnings before interest and taxation (EBIT) to rise by 7-12 percent in its current financial year, with mobile money and data services helping to fuel growth.

Chief Financial Officer Sateesh Kamath told an investor briefing the company had exceeded its EBIT guidance for its year to the end of March 2018, posting an EBIT of 79.3 billion shillings ($789.45 million), higher than the initial guidance of 71-75 billion shillings.

The growth over the previous year was driven by double digit revenue growth in the company’s mobile money and data services.

Revenue from M-Pesa, the company’s pioneering mobile money transfer service, increased by 14.2 percent while mobile data revenue leapt by 24 percent.

Growth in the traditional voice and messaging businesses was far slower. Voice revenue grew by 2.4 percent and messaging (SMS) revenues by 6.2 percent.

Analysts say that growth is still resilient and bucks the trend in telecoms in other markets, where voice revenues are falling due to the use of apps like Whatsapp.

Safaricom shares traded 2.65 percent higher by 0715 GMT.

The company, which is 35 percent owned by South African group Vodacom, has nearly 30 million subscribers, about 70 percent of the mobile subscription market in the East African nation.

Safaricom’s competitors have long argued that the company should be split into separate telecoms and financial services businesses due to its size.

But in January, Kenya’s telecoms regulator ditched a proposal to do that. [L8N1OY0E2]

Safaricom’s chief executive Bob Collymore, who has been on leave since October for medical reasons, addressed the briefing in Nairobi on Wednesday by video conference and said his treatment would continue for a number more weeks, but did not give further details.

Kamath said the company added 1.4 million subscribers in the 2018 fiscal year.

The company would raise its dividend per share by 13 percent to 1.10 shillings, Kamath said. ($1 = 100.4500 Kenyan shillings)

(Reporting by Duncan Miriri; Writing by Maggie Fick)