Safaricom half-year profit drops six per cent to Sh33bn

 

Safaricom Plc half-year profit drops six per cent to Sh33 billion compared to the same period last year.

The telco has attributed the decline to zero-rating of M- Pesa transactions and a drop in voice revenue as users cut on communication budget due to covid-19 economic pressures.

M-Pesa was the most impacted segment, posting a year on year (YoY)decline of 14.5 per cent.

M- Pesa contributed Sh35.9 billion in the period under review compared to Sh42 billion similar period last year.

Safaricom CEO Peter Ndegwa has termed the performance as good given the tough operating environment.

The telco's acting chief operating officer Ilanna Darcy said the ongoing M-Pesa transaction relief to cushion consumers and the overall economic effect of Covid-19 on households dented slowed profits growth.

Ndegwa on Monday said mobile data achieved good performance and still has an opportunity to accelerate further.

Voice declined 6.5 per cent YoY as the growth in customers and usage is offset by continued downward movement on the effective rate per minute, while messaging declined 6.9 per cent YoY in line with global industry trends.

Voice outgoing minutes grew 10.8 per cent YoY driven by “Tunukiwa” the talk more campaign, aimed at customers with low usage enabling them to call at a lower rate in line.

Voice and messaging now stand at 40.0 per cent of service revenue.

Mobile data grew 14.1 per cent YoY with the growth being driven by sustained momentum in customer growth and usage.

One month active Mobile data customers grew 11.6 per cent YoY to Sh22.91 million, while distinct data bundle customers grew 22.7 per cent YoY to Sh15.68 million.

Active 4G devices grew 56.0 per cent YoY while 4G devices using more than 1GB in the telco's network grew 60.6 per cent YoY.

According to Ndegwa, the business aims at driving data affordability by encouraging in bundle usage and data democratization through ensuring affordable 4G handsets in the market, and access to them through initiatives such as the device financing programme.