Safaricom (NSE: SCOM) has recorded a flat growth in the financial year ending March 2021 despite the tough economic conditions triggered by the covid19 pandemic.
Service revenue recorded a marginal decline of 0.3% to close at KES 250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5% YoY to KES 44.79 billion. M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1% drop YoY to KES 82. 64 billion and voice dropping by 4.6% to register revenue of Kshs 82.55 billion.
Earnings/profit Before Interest and Tax delivering ahead of guidance at KES 96.16 billion.
M-PESA
To cushion Kenyans from rapid transmission of the Coronavirus, guided and in collaboration with the Central Bank of Kenya, the industry waived fees on; Person to Person (P2P) for transactions of KShs 1,000 and below, as well as Bank to M-PESA wallet and M-PESA wallet to bank transfers (C2B and B2C). In addition, they zero-rated paybills and tills for hospitals and dispensaries as well as Lipa na M-PESA transactions below KShs1,000. This was lifted from 1 January 2021.
On resumption to charging, they reduced P2P transaction charges by upto 45% for low value transaction bands below KShs 7,500 and retained unlimited M-PESA Kadogo (KShs
100 and below) transactions. M-PESA wallet to Bank and Bank to M-PESA wallet (C2B and B2C) transactions continue to be free.
M-PESA revenue declined 2.1% YoY with a decline of 14.5% YoY in 1H FY21 and recorded significant recovery in 2H FY21 growing 10.1% YoY supported by resumption to charging in Q4 FY21. Total M-PESA transaction value grew 58.2% YoY to KShs 22.04Trn
while volume of transactions grew 29.8% YoY to 11.68Bn. The business added 3.4Mn one month active M-PESA customers up 13.6% YoY to 28.31Mn in FY21 and M-PESA now accounts for 33.0% of service revenue.
Voice and Messaging
Voice and messaging revenue recorded a blended decline of 5.7% YoY in line with global industry trends. Voice outgoing minutes per subscriber grew 19.1% YoY and incoming minutes grew 16.2% YoY driven by “Tunukiwa” talk more campaign, aimed at customers
with low usage. One month active voice customer ARPU however, declined 10.3% YoY. Voice and messaging are now 38.4% of service revenue.
Mobile Data
Mobile data grew 11.5% YoY sustaining the double digit growth trend from prior year. This was largely driven by sustained momentum in customer growth and usage. Distinct data bundle customers grew 12.4% YoY to 16.71Mn while one month active chargeable mobile data customers grew 2.1% YoY to 20.04Mn. Effective rate per MB has continued to decline as they drive affordability, declining 21.9% YoY. Usage per data subscriber grew 32.7% supporting an ARPU growth of 3.7% YoY
