Kelly Choos 
(Bloomberg) –
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Safaricom Plc’s first-half profit surged as the company reinstated fees on mobile money transfers and its customer base increased, chief executive Peter Ndegwa told investors on Wednesday.
Africa’s second-largest company by market value said its net income increased 12% to 37.1 billion shillings ($ 332 million) in the six months to September. Sales on Safaricom’s money transfer and payment platform, M-Pesa, increased 46%, bringing service revenue to 138.4 billion shillings, CFO Dilip Pal said at the meeting. ‘a briefing in the capital, Nairobi.
The value of M-Pesa transactions grew 51.5 percent year-on-year, bringing total revenue to 146.4 billion shillings. The number of customers who use Safaricom services each month increased 4.7% to 31.75 million from the previous year, Pal said.
The company expects profit before interest and taxes for fiscal 2022 to be in the range of 97-100 billion shillings and capital expenditure of 70-73 billion shillings, Ndegwa said. The projections are in part based on the expected economic recovery in Kenya and expansion plans in Ethiopia, the CEO said.
Ethiopia remains a “long-term game” for Safaricom, with capital expenditures for the expansion ranging between $ 1.5 billion and $ 2 billion over the next five years, Ndegwa said in an interview after the briefing. .
The Safaricom-led consortium is studying equity and foreign debt financing for Ethiopia, according to Ndegwa. The company could also borrow from domestic lenders as part of a currency management strategy, he said.
Local financing options the company is considering include term facilities, according to Pal. “We are optimistic that the combination of development finance institutions we are working on will be able to close fairly quickly, above any need for funds,” Pal said.
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Safaricom has mapped the possible risks of implementing market liberalization to new regulatory frameworks in Ethiopia, according to Ndegwa. However, “the opportunities in our view outweigh the risks and uncertainties, in large part because the liberalization of the telecommunications market has been unmistakably positive,” he said.
The company’s shares rose 1% to 40.50 shillings at 2:29 p.m. in Nairobi. The company is trading at 21 times its estimated earnings per share for the coming year.
(Updates with comments from CEO and CFO)
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