Telecommunications giant Safaricom’s half-year profit has dropped for the first time in a span of eight years.
The telco registered KSh.33 billion in profit which is down by 6% compared to last year’s KSh.35.2 billion. According to Safaricom’s acting Chief Finance officer Ilanna Darcy, the decline has been attributed to the COVID-19 reprieve measures where the company waived costs for Kenyans transacting below KSh.1000 shillings via M-Pesa to cushion them from the pandemic woes.
The measure has since eaten up to KSh. 6 billion of the company’s profit.
The company’s revenue on mobile data however grew by 14.1% due to the increased data usage. The fixed service revenue which consists of the Safaricom home fiber reduced to KSh. 4.5 billion from Ksh.4.6 billion last year.
According to the company’s report, the earnings on calls reduced by Ksh. 2.8 billion indicating Kenyans made fewer calls during the pandemic. The company’s Chairman Michael Joseph despite the loss said they have diversified their portfolio and strengthened its balance sheet and believed they will bounce back.
Peter Ndegwa, the company’s Chief Executive Officer said the company is in discussion with the Central Bank of Kenya (CBK) on the review of free cash transfers below Ksh.1000 beyond December 12. “We are not ready at this stage to announce when the free cash transfers end as we are still in engagements with the CBK.”
Safaricom waived M-Pesa charges to help Kenyans embrace cashless transactions as one of the ways to help citizens combat fast-spreading coronavirus. The telco said it arrived at the decision following a meeting with CBK and sector players on Monday, March 16, after President Uhuru Kenyatta urged them to devise ways to help the country fight the epidemic.