Safaricom Records Dip in Profits for 2020/21 FY
Safaricom has recorded flat growth in the financial year ending March 2021 despite the tough economic conditions triggered by the covid19 pandemic. In the 2020-2021 full-year financial results released on Thursday, Safaricom’s profits fell to KES 68.7 billion from KES 73.6 billion posted last year.
This is the firm’s first annual profit dip in nearly a decade since the year closing in March 2012.
Service revenue recorded a marginal decline of 0.3% to close at KES 250.35 billion driven by double-digit growth in mobile data business, which grew by 11.5% YoY to KES 44.79 billion.
M-PESA and Voice revenue declined marginally with M-PESA recording a 2.1% drop YoY to KES 82. 64 billion and voice dropping by 4.6% to register a revenue of Kshs 82.55 billion.
Safaricom Chief Executive Officer Peter Ndegwa attributed the reduced revenues to tough economic conditions triggered by the Covid-19 pandemic.
“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 Ndegwa.
Earnings Before Interest and Tax delivering ahead of guidance at KES 96.16 billion.
M-PESA accounted for 33.0% of the total service revenue down from 33.6% last year, impacted by the waiver of the Peer-to-Peer (P2P) transactions fees.
Responding to the harsh impacts of the pandemic, Safaricom waived fees for transactions below KES 1,000, which saw the processing of free transactions worth KES 4.4 billion.
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. Safaricom has also announced that the consumer M-PESA App will be launched in quarter one of the current financial year.
In spite of the challenging year, the Safaricom board has recommended a final dividend of KES 0.92 per share amounting to KES 36.86 billion, bringing the total payout for the year to KES 54.89 billion.
Commenting on the future of the business, Ndegwa noted: “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.”