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Safaricom posts Sh. 33.7 billion profit in six months

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Safaricom 2020 Half Year Results: Safaricom has posted a profit decline of six per cent in six months. The telco giant posted net profit of Sh. 33 billion down from the Sh. 35 billion it posted in the same period the previous year.

Safaricom 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 revenue fell by Sh. 6.1 billion while income from betting saw a Sh. 700 million drop.

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“Our business has proved to be resilient despite tough operating conditions. 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,” Safaricom chief executive officer Peter Ndegwa said.

Despite a 4.8 per cent drop in service revenue, Safaricom increased capital expenditure by  25.5 per cent to Sh. 22.75 billion, signaling  investment commitment to building a network infrastructure that supports the country’s economic development. Voice service revenue dropped by 6.5 per cent to Sh. 40.19 billion while M-Pesa revenue revenue dropped by 14.5 per cent to Sh. 35.89 billion.

Mobile data grew 14.1 per cent Year on Year with the growth being driven by sustained momentum in customer growth and usage. One month active Mobile data customers grew 11.6 per cent Year on Year to Sh. 22.91 million, while distinct data bundle customers grew 22.7 per cent Year on Year to Sh. 15.68 million. Active 4G devices grew 56.0 per cent Year on Year while 4G devices using more than 1GB in the telco’s network grew 60.6 per cent Year on Year.

“As we go into our third decade as an organization, we aim to create a technology business by developing new digital ecosystems in health, agriculture and education sectors as we aim to provide digital solutions for our customers,” said Ndegwa. His sentiments were echoed by Safaricom board chairman Michael Joseph. “We remain steadfast in ensuring management continues to build on the strong company position that has been established over the last 20 years, running a purpose-driven business, that continues to transform lives and drive future growth,” Joseph said during the releases of the Safaricom 2020 Half Year Results.

With the new business strategy and the renewed focus on the customer, Safaricom said that it expects to build on this momentum that has been gained during the second quarter of the period under review. “Among customer strategy, we will prioritize MSMEs and SMEs who will be empowered through tailor-made services and products to enable these entrepreneurs to manage their businesses better. This includes the innovative product, Pochi la Biashara, that will allow them to separate business and personal wallets and Lipa Na M-PESA Merchant App that enables small businesses to effectively manage their business tills,” said Ndegwa.

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