Home Business Safaricom H1 net profit down to Ksh 27B hurt by Ethiopia unit

Safaricom H1 net profit down to Ksh 27B hurt by Ethiopia unit

Safaricom Plc Group half year net profit has declined by 10pc to Ksh 27.2 billion from Ksh 30.2 billion reported last year.

The profit reduction in six months of the year to September 2023 is on account of increased foreign exchange losses and higher operational expenses in the hyperinflationary Ethiopian market.

Channel 1

Despite group reporting a 7.3pc year-on-year growth in total revenue which grew to stand at Ksh 164.6 billion the telco took a hit in forex losses which amounted to Ksh 24.9 billion during the period under review.

While the firm reported better performance in its Kenyan unit whose net profit increased 10.9pc to Ksh 41.6 billion powered by higher service revenue of Ksh 159 billion, Safaricom Ethiopia net profit loss amounted to Ksh 14.4 billion due to higher operation costs which surged to Ksh 10.5 billion from Ksh 6 billion.

The firm nonetheless maintained a strong performance in Kenya where service revenue grew 8.5pc to Ksh 157.2 billion as a result of price cuts which increased use of its core service among consumers.

“We have delivered a great set of results largely by supporting our customers with enhanced value and reduced prices on our products and services,” said Peter Ndegwa, Safaricom Chief Executive Officer.

The telco says since 2020, it has progressively cut data prices by 65pc, 44pc in outgoing calls per minute by 44pc and up to 61pc reduction in M-PESA tariff.

“The reduced prices have seen our customers use more of our services hence the double-digit growth in profitability and revenue,” he added.

Mobile money revenue in Kenya grew 16.5pc year-on-year to Ksh 66.2 billion as messaging revenue grew 6pc to Ksh 5.7 billion.

On the other hand, mobile data revenue in the Kenyan unit grew 12.5pc to Ksh 29.6 billion same as fixed line and wholesale revenue which grew 9.1pc to Ksh 7.4 billion.

In the six months period, only voice revenue registered a 3pc decline to Ksh 38.7 billion.

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