How COVID-19 Ate Into Safaricom’s Half Year Profits

m-pesa charges 2022

In its latest financial report, Safaricom PLC has now revealed how much of an effect the ongoing COVID-19 pandemic had on its business in 2020. As much as there are services from the firm that saw growth, Safaricom did take a hit when it came to the total half-year profits.

As we all know, the COVID-19 pandemic was the cause of the waivers ordered as part of an agreement between the government and telcos operating in the country. The zero-rating on M-PESA transactions did have an adverse effect on the mobile money service’s revenue falling by 14.5%n YoY (year-on-year).

This is definitely something that had Safaricom alongside other firms complaining about as they were losing billions on a monthly basis. According to previous reports, the extension of the waiver order was done without consultation making the situation even worse. By July, Safaricom was projecting to lose over 19 billion by the end of 2020.

However, the action that seemed like an act of goodwill to many had the service’s value grow by 32.9% YoY. The number of transactions also spiked by 14.9% YoY to 5.12 billion transactions.

Voice calls also saw a 6.5% YoY as well as messaging 6.9% YoY. This would be quite odd considering most people were forced to depend on their devices for daily communication with friends, colleagues and family. All this saw a 10.5% decline in EBIT (Earnings before interests and taxes) to KES 44.968Mn.

“Service revenue slowed down in Q1, declining 8.4% YoY, however, some recovery was visible in Q2 recording a decline of 1.2% YoY as restrictions began to lift and as we shifted into the rebuilding phase,” the report partly reads.

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