Safaricom 2020 results with CEO transition

Safaricom PLC announced its financial results at a unique event, streamed online, that featured its incoming and outgoing CEO’s.

Overall revenue grew 5% to Kshs 251 billion as M-Pesa revenue grew 12% to Kshs 84 billion with mobile data growing 12% to Kshs 40 billion. Voice and SMS revenue declined. Profit before tax increased to Kshs 105.77 billion up 17% from the previous year, and the company will pay out Kshs 56 billion as dividends to shareholders, up from 50 billion in 2019.

The firm’s Chairman Nicholas Ng’angá welcomed the new CEO Peter Ndegwa who has been in office for a few weeks now and thanked Michael Joseph who had been appointed interim CEO following the demise of Bob Collymore in July 2019.

Ng’angá asked that the country’s regulatory period, after Coronavirus, be designed to support the revival of businesses, not one that increases taxes for consumers and businesses, noting that the company had paid Kshs 111 billion in taxes and fees to the government during 2019.

Michael Joseph said that in his second stint as CEO they had simplified offers to customers and mobile data had double-digit growth while gaining market and increasing data revenue. Safaricom and Vodacom have acquired the M-Pesa brand from Vodafone and will roll out M-Pesa across Africa with new products and lower costs. Safaricom is also pursuing one of the new licenses in Ethiopia.

Sateesh Kamath, the Chief Financial Officer, said the results were adjusted for the one off-gain of acquiring M-Pesa and that service revenue still grew in the year, despite the decline of the sports betting and the reduction of tariffs the company had undertaken to support consumers during Coronavirus. He said that they plan to introduce more use cases to cannibalise M-Pesa “withdrawal” revenue and instead grow customer e-balances in the long run, while Joseph said that they plan to roll out a unit-trust investment product.

Peter Ndegwa, the incoming CEO, announced that the company would roll out a device financing offer to enable Kenyans to access 4G smartphones, with affordable data, by paying as little as Kshs 20 per day. He concluded by saying that Coronavirus made it impossible for the company to provide forward guidance on earnings and capital expenditure for 2021 and that they would do that at a later date.

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