Safaricom net profit leading to September rose 12.1% as announced by the telco in its unaudited half-year financial results. This accounts for a profit of KES 37.05 billion thanks to M-PESA revenues that seem to have recovered on the back end of the free transactions mandated by the State.
According to the telco, voice and messaging revenue increased during the same period. This coincided with the recent lift of COVID-19 restrictions.
M-PESA saw its revenue rise by 45.8% or KES 16.4 billion, to KES 52.3 billion. This is associated with the return of charging transactions of transactions below KES 1000 in January. This is alongside the improved business activity that contributed to a 16.9% increase in service revenue to KES 138.4 billion.
“Growth in service revenue was mainly attributed to M-PESA revenues as well as mobile data, voice and fixed business,” said Safaricom chief financial officer Dilip Pal at an investor briefing on Wednesday.
It was quite clear that the telco had been suffering huge losses since last year when they agreed to bring in free M-PESA transactions. Of course, this was an effort to cushion Kenyans against the difficult financial times amid the pandemic.
“This reporting period was preceded by an extremely challenging Financial Year. The COVID-19 pandemic altered the environment for all businesses and ours was no exception,” said Safaricom CEO, Peter Ndegwa.
“In responding to the pandemic, we remained true to our purpose of Transforming Lives. A guiding light in our efforts in supporting and helping the country, through our transformational products and services to weather the storm. These efforts are paying off in building resilient individuals, communities and businesses, especially now as we gradually begin to experience a near normalcy period.”
This move would then mean that people could save a few extra coins and also encourage cashless payments on mobile phones helping reduce the spread of the virus. But with the economy steadily recovering, Safaricom began taking steps to bounce back to high profits after months of huge losses.