Safaricom recorded a six percent drop in profits to Ksh33 billion for the half year ended June 2020, as compared with a similar period in 2019.
The company recorded a profit of Ksh35.2 billion in a similar period last year, and this is the first half year profit drop since 2012.
The giant telco attributes the drop to zero-rating of M-Pesa transactions below Ksh1,000 due to Covid-19. As a result, M-Pesa generated Ksh35.9 billion in revenues, a drop from Ksh42 billion last year. Ksh4.5 billion was lost on transfers and a Ksh1.6 billion on payments.
“The free cash transfers have weighed hard on our half year results. M-Pesa revenues now account for 30 per cent of total revenues in comparison to 33 per cent last year,” noted Safaricom Acting Chief Finance Officer Illana Darcy.
Mobile data revenues grew by 14.1 per cent to Ksh22.2 billion from Ksh19.5 billion for a similar period in 2019. On average, the chargeable gigabyte per user grew by 33 per cent to 1.4GB in the period under review.
Fibre connectivity to homes and business experienced a small drop to Ksh4.5 billion from Ksh4.6 billion.
Safaricom’s service revenue in the period have contracted by 4.8 per cent to Ksh118.4 billion from Ksh124.3 billion last year.