Safaricom Plc Net earnings for the six months period ended 31st September 2020 slumped 6% to KSh 33.069 Billion compared to a net profit of KSh 35.195 Billion over a similar period last year.
This is as effects of the COVID-19 pandemic disrupts virtually all sectors of Kenya’s economy, the most profitable firm in East Africa being no exception.
The firm’s board attributes this subdued financial performance to Safaricom’s response to the COVID-19 pandemic, hitting its revenue streams-including the M-PESA cash transfer platform.
The telco firm’s total revenue also fell 4.1% to KSh 124.5 Billion from KSh 129.9 Billion during the period under consideration.
Service revenue for the six months ended 31st September 2020 declined 4.8% to KSh 118.4 Billion from KSh 124.3 Billion recorded the previous period of 2019.
“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.
While Safaricom recorded growth in subscriber numbers, this was offset by a decline in voice revenue as customers made fewer calls.
Mobile data grew 14.1% year on year. This growth was driven mainly by a shift by more customers to work from home, coupled with Safaricom’s continued investments to expand its fibre optic network.
To support this growth, Safaricom’s capital expenditure for the six months ended 31st September 2020 stood at KSh 22.8 billion, a growth of 25.5% year on year.
Safaricom’s pre-tax profit hit a decline of 12.8% from KSh 51.3 Billion at the end of September, 2019 to KSh 44.7 Billion at the end of the six months ended 31st September, 2020.
Net cash from operating activities fell 14.1% from KSh 57.1 Billion in H1, 2019 to KSh 49 Billion in H1, 2020.
Safaricom is involved in several initiatives to cushion households and businesses from the disruptive effects of COVID-19.
“These include zero-rating M-PESA transactions below KSh 1,000, doubling bandwidth for our fibre to home/business customers, setting up the 24/7 COVID-19 information centre in partnership with the Ministry of Health among other initiatives,” said Peter Ndegwa, CEO Safaricom Plc.