Mobile telephony company Safaricom Plc has posted a 6.8 per cent drop in earnings for the financial year ending in March 2020.
This is the company’s first dip in profit in 10 years. Profits fell from KSh73.6 to KSh68.7 billion last year. It has largely been attributed to the temporary waiver of fees on MPesa transactions of amounts less than KSh1,000 between March 2020 and December of that year. This waiver was one of the services extended by the company to cushion its subscribers against the economic effects of the coronavirus pandemic.
Subsequently, earnings from MPesa reduced from KSh84.4bn to KSh82.6 bn. Earnings from voice services declined from KSh43.5bn the previous year to KSh42.4 bn.
“We started our financial year in a lock-down and ended the year in another lock down,” said Safaricom Chairman Michael Joseph. “The board takes note of our business resilience especially a rebound in growth in the second half of the year. This has given us the opportunity to support our shareholders at this difficult time.”
Revenue from mobile data grew by 11.5 per cent to KSh22.6 bn. The company credits this to increased penetration of its 4G network. Revenue from fixed data grew by six per cent to KSh9.5 billion and this is attributable to increase consumption by customers during the lockdown period.
“Our most critical support was keeping our network stable,” said Safaricom Chief Executive Officer Peter Ndegwa. “We have invested Ksh.339 million in supporting the country through our different foundations in addition to the free mobile-money transfers.”
The company board has recommended the payment of 92 cents final dividend per share for a combined share holder payout of KSh36.9 bn. “We continue to leverage our strong balance sheet as we implement our new Agile way of working that will ensure total focus on the customer and build a stronger and more resilient business for our employees and all our stakeholders,” said Ndegwa