Safaricom’s net profit for the six months ended September fell by 10 per cent to KES 33.5 billion on the heavy costs incurred during its entry into the Ethiopian market, a review of the Mobile Termination Rate (MTR) this year and the introduction of Excise Tax on SIM Cards.
During the release of the April to September financial results, Safaricom announced that its profits after tax dropped from KES 37 billion to KES 30.2 billion.
This was a KES 6.8 billion drop and becomes the lowest profits the telco has reported in a half-year period over the past four years.
“We are pleased with our performance in first six months of FY23 despite the challenging operating environment characterised by heightened regulatory risk in our industry, geopolitical tensions, and elevated inflationary pressures negatively impacting consumer wallets and effectively lowering consumer spending power,” Safaricom in it a half year results.
The telco further stated that revenue was boosted by service revenue that grew 4.6 per cent to KES 144.8 billion, supported by M-Pesa, mobile data and fixed data growth.
Mobile data revenue grew by 11.3 per cent to KES 26.30 billion, while M-PESA revenue rose by 8.7 per cent to KES 56.86 Billion.
However, voice service revenue dropped by 3.8 per cent to KES 39.88 Billion,
The revised Mobile Termination Rates (MTR) from KES 0.99 to KES 0.58 impacted performance in the period, the firm said.
“Given the impact of the Mobile Termination Rates from KES 0.99 to KES 0.58, a slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones and a failed rain season leading to more economic hardship for the country, Safaricom has done very well to deliver solid revenue growth and a net income that is within the expected range,” Safaricom CEO Peter Ndegwa.
Read also; Safaricom Ethiopia Generates Revenue of KES 98.3 Million in its First Month in Operation.
