NAIROBI, Kenya, Nov 11 – Safaricom posted a Sh7 billion drop in profit after tax in the six months to September 30, weighed down by inflation, newly introduced taxes, currency depreciation and Ukraine-Russia war.
The telco’s net profit dropped from Sh37.1 billion in the six month to September 30 2021, to Sh30.2 billion in the same period this year.
“We are pleased with our performance in first six months of FY23 despite the challenging operating environment characterized by heightened regulatory risk in our industry, geopolitical tensions, and elevated inflationary pressures negatively impacting consumer wallets and effectively lowering consumer spending power,” Safaricom said in it a half year results.
Revenue was boosted by service revenue that grew 4.6 per cent to Sh144.8 billion, supported by M-Pesa, mobile data, and fixed data growth.
Mobile data revenue grew by 11.3 per cent to Sh26.30 billion while M-PESA revenue rose by 8.7 per cent to Sh56.86 Billion.
However, voice service revenue dropped by 3.8 per cent to Sh39.88 Billion,
The firm said that the revised Mobile Termination Rates (MTR) from Sh0.99 to Sh0.58 impacted performance in the period.
“Given the impact of the Mobile Termination Rates from Sh0.99 to Sh0.58, a slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones and a failed rain season leading to more economic hardship for the country, Safaricom has done very well to deliver solid revenue growth and a net income that is within the expected range,” said Safaricom CEO Peter Ndegwa.
