Safaricom sees earnings growth

SAFARICOM, East Africa’s largest company by market value, raised its guidance for full-year earnings as chief executive Bob Collymore said he expects to return to Kenya soon from medical leave.

Earnings in the 12 months to March 2019 are expected to grow as much as 12 percent to 89 billion shillings (R11.04bn), from 79.3bn shillings last year, chief financial officer Sateesh Kamath said yesterday in Nairobi.

The company plans to double the number of home-internet connections and upgrade its mobile-money platform to grow its M-Pesa business in the year ahead, he said.

“We remain confident that the macroeconomic conditions will have gradual improvement, providing a conducive environment for our company to continue to deliver growth,” Kamath said. “We are hence moving up our EBIT guidance.”

Kenya’s economy expanded at the slowest pace since 2011 last year, reined-in by a drought that curbed farm output, a protracted presidential election and a slowdown in bank lending to the private sector.

Growth is expected to accelerate to as much as 6 percent this year from 4.9 percent in 2017, according to government estimates.

Despite the economic slowdown, Safaricom grew net income by 14 percent in the 12 months to March to 55.3bn shillings. Revenue increased 9.8 percent to 233.72bn shillings, driven by a 14 percent rise in M-Pesa revenue, 24 percent growth in mobile-data earnings, and a 5.1 percent advance in customer numbers.

Safaricom’s shares gained 2.7 percent by 9.53am in Nairobi to the highest since April 20. The stock has advanced 8.4 percent so far this year, outpacing a 4.4 percent increase in the Nairobi Securities Exchange All Share Index.

“The fact that the business ran well while Collymore was away tells you the strength of the team,” said Eric Musau, an analyst at Nairobi-based Standard Investment Bank. – Bloomberg