Telecommunications giant  Safaricom, recently announced it's financial results of the year, which revealed strong revenue growth. Profits were up from KShs 89.0 Billion in FY19 to KShs 101.0 Billion in FY20, a staggering 13.5 percent growth before interest and tax deductions.

In Summary:

Operating Review
Service Revenue in the year grew 4.8% to KShs 251.22bn as at 31 March 2020 from KShs 239.77bn driven by sustained customer growth, mobile data growth returning to double digit along with sustained M-PESA and fixed data growth. The growth was partially offset by COVID-19 response and a contraction of betting industry.
On an underlying basis Service Revenue increased 5.9%. Customers in the year increased 12.2% to 35.6mn as at 31 March 2020. M-PESA one month active customers increased 10.0% to 24.9mn while mobile data one month active chargeable customers increased 10.2% YoY to 19.6mn.
Capital expenditure in the network for the year ended 31 March 2020 stood at KShs 36.10bn. To finance this expansion, the company levered its statement of financial position and continues to invest a significant portion of internally generated cash.
Share of Profit of Joint Venture
This is a one-off exceptional gain arising from acquisition of the M-PESA brand. The profit and total comprehensive income for the year grew 19.5% YoY but normalized for this exceptional item, it grew 14.3% YoY.
Borrowings
As at 31 March 2020, bank borrowings were KShs 8.00bn while cash and cash equivalents stood at KShs 26.76bn leaving a net cash of KShs 18.76bn.
Taxation
The Group continues to be a major contributor to the revenues of the Government and remitted KShs110.98bn in duties, taxes and license fees for the year ended 31 March 2020. This increased the total duties, taxes and fees paid since inception to KShs 809.50bn.
Dividends
The Board remains committed to investing in the business and continuing our strong record for paying progressive dividends each year. The proposed dividend for FY20 is KShs 56.09bn. The proposed dividend per share (DPS) of KShs 1.40 has been computed at 80% of the profit and total comprehensive income for the year excluding the one-off exceptional item of share of profit of joint venture of KShs 3.3bn, divided by number of issued share capital on IFRS 15/16 basis.

 Key Highlights

• Acquisition of M-PESA Brand, partnership with Amazon Web services, and its pursuit to drive a savings culture and wealth management through S, which is currently under testing.
• Messaging revenue declined by 12.3% to KES 17.19bn.
• Fixed service revenue increased by 10.7% to KES 8.97bn.
• One month active overall customer base increased by 9.5% to 28.63mn.
• One month active M-PESA customers increased by 10.0% to 24.91mn.
• One month active chargeable mobile data customers increased 10.2% to 19.62mn