Telecommunications firm Safaricom has announced a 19.6 per cent rise in net profit to $378.6 million (Ksh38.1 billion) in the year ended March 2016.
Revenues from services such as voice, M-Pesa, SMS and mobile data expanded by 13.8 per cent to $1.77 billion (Ksh177.8 billion).Income from other sources such as handsets and construction brought in an extra $177.9 million (Ksh17.9 billion).The single largest growth of 42.7 per cent in revenue was in mobile data whose sales hit $210 million (Ksh21.2 billion).
Total revenue increased by nearly 20 per cent to $1.94 billion (Ksh195.7 billion). Much of the growth is attributed to non-voice services.
“Data remains our fastest growing revenue stream and we are focused on growing it further through accelerating smartphone penetration, growing 3G and 4G users, offering relevant content,” said the firm in a press statement.
The second largest growth was in M-Pesa services which expanded by 27.2 per cent to $412 million (Ksh41.5 billion).
The EBITDA (earnings before interest, taxes, depreciation and amortisation) margin – which shows a firm’s ability to earn a profit and generate cash after netting out what is not core to its internal operations – was up to 44.56 per cent compared to 43.58 per cent in year ending March 2015.
The Nairobi Securities Exchange-listed firm has proposed a dividend of 76 cents per share, up from 64 cents in the previous year.
The Communications Authority of Kenya usually issues quarterly figures for number of subscribers, which give Safaricom a 67 percent share of Kenya’s 35 million users. In mobile data, or internet services, Safaricom’s revenues were 85.50 per cent of the market share in 2015, while had 14.43 percent, Orange had 0.01 percent and Equitel, operated by Equity Bank’s subsidiary Fin serve, 0.06 percent.
Last year the company fought off moves to declare it a dominant player. Declaring Safaricom dominant would put it in a more restricted business environment with additional obligations on transparency, marketing and product pricing. The company could also be required to split its massive business into independent units.
Safaricom dominates the Kenyan mobile market, sweeping up more than 90 percent of revenues in areas such as voice calls and text messaging, according to regulator data that could further fuel a debate about competition in the industry.