Dar es Salaam. Vodacom Tanzania recorded a profit of Sh15.8 billion in the three months to June 30, 2024 as service revenue grew by 20 percent amid expanding mobile money services.
According to the company’s latest financial statement, the net profit reached Sh15.8 billion compared to a loss of Sh7 billion in the same period last year. Vodacom’s financial year ends on March 31.
The company highlighted that its quarterly success reflects effective strategy execution, resulting in revenue growth and delivered cost savings of Sh13.5 billion.
Vodacom managing director Philip Besiimire stated that revenue generated through new services in M-Pesa, mobile and fixed services continued to grow and diversifying the company’s sources of income.
“The improved business profitability reflects our strategy execution which resulted in revenue growth and delivered cost savings of Sh13.5 billion in the quarter,” said Mr Besiimire in the statement.
According to him, M-Pesa customers increased 24.7 percent to 10.3 million, with over 4.5 million customers using lending, savings and insurance products from their mobile devices during the quarter.
This quarterly success follows an annual profit of Sh53.42 billion for the financial year ending March 2024, up from Sh44.55 billion in the previous year.
The company had a loss of Sh20.26 billion in the year ending March 2022.
By the end of June 2024, services revenue stood at Sh347.81 billion compared to Sh290 billion reported in the same quarter last year.
According to Mr Besiimire, transactions worth Sh270 billion were done through the service designed for pooled group savings “M-Koba,” while short-term financing disbursed through financial products reached nearly Sh600 billion.
“Approximately 60 percent of this amount was issued to small businesses, offering easy access to short-term financing for small and medium-sized enterprises (SMEs),” said Mr Besiimire.
Government electronic payments also played a role during the quarter with 800 institutions processed transactions electronically.
Such was the case for business payments which grew significantly as customers continue to prefer electronic payment channels.
The Vodacom boss revealed that number of businesses that accept payments platform such “Lipa kwa Simu” has since more than doubled year-on-year.
“Customers using the platform grew by over 35 percent, and the transacted value increased more than 60 percent to exceed Sh1 trillion per month,” he said.
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Insurer and financial services provider Britam posted a 22.5 percent jump in net earnings for the half-year ended June 2024, to Sh2 billion, buoyed by increased investment income.
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“Our customer-centric approach is fueling growth in our customer base and product uptake, particularly through micro-insurance, partnerships, and digital channels.”
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The increased investment income helped offset the 12.7 percent decline in net insurance service result to Sh2.13 billion in the wake of claims paid out rising at a faster pace than that of premiums received.
Britam said insurance revenue, which is money from written premiums, increased to Sh17.8 billion from Sh16.6 billion, primarily driven by growth in the Kenya insurance business and regional general insurance businesses, which contributed 30 percent of the revenue.
The group has a presence in seven countries in Africa namely Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique, and Malawi.
Britam’s insurance service expense hit Sh13.6 billion from Sh11.3 billion, while net insurance finance expenses rose 2.6 times to Sh12.3 billion during the same period.
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Britam’s growth in profit is in line with that of other Nairobi Securities Exchange-listed insurers, which have seen a rise in profits.
Jubilee Holdings net profit in the six months increased by 22.7 percent to Sh2.5 billion on increased income from insurance, helping the insurer maintain Sh2 per share interim dividend.
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