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    Safaricom Results: Profits Dip For The First Time

    Safaricom Results: Safaricom Limited, East Africa’s most profitable company has announced its HY (half-year) results ending 30th September 2020 for the 2020/2021 financial year.

    According to the company through a broadcast that was streamed live on YouTube and other online platforms such as zoom, the COVID-19 pandemic ate into the profits though there was also sustained investment to support customer growth.

    The carrier’s service revenue dropped by 4.8% YoY to KES 118.41b. Profits before interest and tax dropped to 10.5% to KES 44,968.0m.

    Voice and Messaging Results

    There was also a drop in both voice and messaging services registering a 6.5% and 6.9% decline, respectively. This according to the company was due to growth in customer usage that is offset by continued downward movement on the effective rate per minute.

    However, drop messaging is a worldwide phenomenon, where consumers are preferring online messaging services such as WhatsApp.

    In the past, Safaricom has been making a lot of money from voice and messaging services.

    Mpesa

    Mpesa, the companies’ main source of income has also registered a dip in profits for the first time since its inception.

    It should be noted that earlier this year, CBK directed that mobile money products to zero-rate person to person transfers of under Ksh. 1000, as well as bank to M-PESA and wallet to bank transfers.

    Other services such as payments of goods and services were zero rated, further eating into Mpesa profits.

    These among other measures were put in place to cushion Kenyans against the effects of COVID-19, but which further made Mpesa lose billions from such services.  

    And as Safaricom CEO Peter Ndegwa put it, “This has been a tough period for businesses and our customers and we committed ourselves to walk through this journey together. During this period, we took several initiatives to support our customers and the government to pull through this pandemic.”

    Mpesa platform for the first registered a 14.5% YoY drop, although the total Mpesa value grew by 32.9% YoY to Ksh. 9.04 trillion while the volume of M-PESA transactions grew to Ksh. 5.12 billion transactions.

    During the announcement, Acting CFO Illanna Darcy presented the financial results following the departure of Sateesh Kamath to Vodafone.

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