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Kenya

Safaricom M-PESA Revenue Drops As Net Profit Decreases by 6pc

NAIROBI, Kenya November 9 – Safaricom has reported a growth decline in MPESA whose revenue dropped by 14.5 percent to Shs 35.89 billion during the second quarter.

While releasing financial results for the half year ended 30th September, 2020 , Acting Chief Finance Officer Ilanna Darcy nonetheless noted that M-PESA transactions increased 32.9 percent year on year attributing the growth to innovations made during the period.

The drop in MPESA revenue comes at a time when the telco provider implemented a waiver on money transactions to encourage widespread adoption of cashless payments.

Darcy noted that the move affected transfers and payments and was further affected by betting which continued to decline as the firm felt the impact of the contraction of the industry.

Safaricom further announced that over the same period, mobile data grew by 1.2 billion shillings while voice declined by 0.7 billion shillings.

Overall, the telco’s net profit decreased by 6.0 percent to Shs 33.07 billion with service revenue hitting Shs 118.41 billion.

Safaricom Chief Executive Officer Peter Ndegwa noted that the business proved to be resilient despite tough operating conditions necessitated by the COVID-19 pandemic.

“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,” noted Mr Ndegwa.

Meanwhile, the firm’s service revenue dropped by 4.8 percent drop while the firm’s capital expenditure increased by  25.5% to Shs 22.75 Billion.

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“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,” added Ndegwa

Michael Joseph, Chairman, Safaricom Board of Directors noted that the firm will remain steadfast in ensuring management continues to build on the strong company position.

As part of its strategy, the firm also announced plans to provide 100 percent 4G network coverage across the country by end of this year as part of its growth strategy focused on being the technology partner of choice.

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