Kenya:Safaricom half-year profit drops for the first time in 8 years

By Samuel Ouma

Michael Joseph, Chairman of Safaricom Plc Board of Directors

Safaricom PLC has recorded a 6 per cent slide in its half-year net earnings from Ksh 35.2 billion last year to Ksh33 billion.

Releasing financial results for the half-year ended 30th September 2020, on Monday, the telco attributed the decline to the roll-out of free cash transfers below Ksh.1000 to encourage cashless transactions and a decline in voice calls.

M-Pesa revenues decreased to Ksh35.9 billion from Ksh42 billion during the same period last year.

The firm’s total revenue also fell 4.1% to KSh 124.5 Billion from KSh 129.9 Billion during the period under review.

Service revenue also declined 4.8% to KSh 118.4 Billion from KSh 124.3 Billion recorded the previous period of 2019 and the firm’s capital expenditure increased by 25.5% to Shs 22.75 Billion.

“The adverse service revenue performance is mainly attributed to the decline in M-PESA and voice revenues. Zero-rating of M-PESA transactions impacted M-PESA revenue which declined 14.5% year-on-year,” said Michael Joseph, Chairman of Safaricom Plc Board of Directors.

Over the same period, mobile data grew 14.1 per cent as more customers resorted to work from home due to Covid-19 while messaging declined by 6.9 per cent.

Safaricom Chief Executive Officer Peter Ndegwa said described the performance as “good” given the negative impact of the pandemic on the economy.

“There is no doubt that COVID-19 has dealt a huge blow to many people not just in Kenya, but across the globe. This has been a tough period for businesses—small and large alike—and our customers. We are committed to walk through this journey together,” noted Mr Ndegwa.

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