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Kenya

Safaricom records a 6.8pc drop in its 2020 Net Income to Sh68.68bn

NAIROBI, Kenya, May 13 – Safaricom has recorded a 6.8 percent decline in its 2020 net income to Sh68.68 billion, owing to the impact of the ongoing coronavirus pandemic.

According to the NSE listed telco, service revenue closed at Sh250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5 percent year-on-year to Sh44.79 billion.

M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1 percent drop to Sh82. 64 billion while voice dropped by 4.6 percent to register revenue of Sh82.55 billion.

The company’s Earnings before Interest and Tax declined 5.3 percent to Sh96.16bn.

During the period under review, the firm’s free Cash Flow went down 8.2 percent to Sh64.52 billion while messaging revenue declined by 11.7 percent to Sh13.60 billion.

Peter Ndegwa, the firm’s CEO said; “We have not been spared from the tough operating environment, as evidenced by the dip in our service revenue, earnings before interest and tax and net income.”

“We remained resilient in a disruptive year, demonstrating strong operational capacity, diligence and commitment in supporting the country, our customers and shareholders through this uncertain time. Our immediate focus in the year has been to ensure that network capacity, operations and financial services are prioritized to limit disruptions,” he added.

Growth

Mobile data revenue however increased by 11.5 percent year on year to Sh44.79 billion.

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At the same time, the total one-month active customer base increased by 9.9 percent to 31.45 million.

One month active M-PESA customers increased 13.6 percent to 28.31 million, while one month active mobile data customers increased 8.1 percent to 23.77 million.

“Whilst we anticipate facing more subdued operating climate in the short term as we recover from the impact of the pandemic, our business is well placed to cope with the challenges arising from the pandemic,” Ndegwa said.

“During this period, the Board declared for the first time, an interim dividend of Sh0.45 per ordinary share held amounting to Sh18.03 billion. The final dividend per share (DPS) of Sh0.92 dividend per share amounting to Sh36.86 billion has been proposed by the Board for approval at the next Annual General Meeting (AGM).”

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