Leading telecom operator Safaricom has announced a 6.8 per cent reduction in net income in the financial year ending March 2021.
In the 2020-2021 full-year financial results released on Thursday, Safaricom’s profits fell to Ksh68.7 billion from Ksh73.6 billion posted last year.
This is the firm’s first annual profit dip in nearly a decade since the year closing in March 2012.
Safaricom Chief Executive Officer Peter Ndegwa attributed the reduced revenues to tough economic conditions triggered by the Covid-19 pandemic.
Between March and December last year the telco waived fees on mobile money transactions of up to Ksh1000.
Service revenue recorded a marginal decline of 0.3 per cent to close at Ksh250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5 per cent YoY to Ksh44.79 billion.
M-Pesa and Voice revenue declined marginally with M-Pesa recording a 2.1 per cent drop YoY to Ksh82. 64 billion and voice dropping by 4.6 per cent to register revenue of Kshs 82.55 billion.
“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,” said Peter Ndegwa, Safaricom CEO.
M-Pesa accounted for 33 per cent of the total service revenue down from 33.6 per cent last year, impacted by the waiver of the Peer-to-Peer (P2P) transactions fees.
To support Micro and Small Medium Enterprises (MSMEs), the company introduced the Pochi la Biashara, M-pesa Business App, Bill Manager, Merchant Transacting till and Self On-Boarding process.
In spite of the challenging year, the Safaricom board has recommended a final dividend of Ksh0.92 per share amounting to Ksh36.86 billion, bringing the total payout for the year to Ksh54.89 billion.
“Despite a tough financial year, the company is committed to investing in the business and maintaining a consistent dividend payout ratio in line with our dividend policy. Our guidance for the Financial year 2022 is at the range of KES 105 – 108 billion for Earnings Before Interest and Tax and Capital Expenditure guidance in the range of KES 40-43 billion,” said Ndegwa.
Safaricom has also announced that the consumer M-pesa App will be launched in quarter one of the current financial year.