Safaricom half-year net profit has dropped by six per cent to Sh33.07 billion with M-Pesa revenue declining the most on account of the free transactions that support customers during the Covid-19 period.
The results, covering the period between April and September, also saw voice and messaging revenue dip amid a rise in coronavirus infections that forced the State to enforce disruptive measures such as curfew and ban on social gatherings.
M-Pesa revenue dropped by Sh6.08 billion while voice and messaging revenues dipped by Sh2.79 billion and Sh0.53 billion respectively, hurting profitability.
Chief Executive Peter Ndegwa on Monday described the performance as "good" given the massive disruption that the virus has caused to most businesses in the country.
"It has been a good half year and we are seeing improvement in the second half. However, we know Covid-19 disruption is not over given the resurgence in infections," he said.
M-Pesa revenue dropped by 14.5 per cent to Sh35.89 billion despite the value of transactions rising by 32.9 per cent to Sh9.47 trillion.
The drop was on account of the decision to zero-rate fees on transactions of Sh1,000 and below to reduce cash handling during the pandemic.
"We have seen increased activity in the M-Pesa eco-system as customers take advantage of the free fees on person to person and Lipa na M-Pesa transactions below Sh1,000 and M-PESA wallet to bank and bank to wallet transfers," said the telco.
However, the telco benefitted from the increased number of people who were working from home to lower risk of contracting the infectious virus.
Mobile data revenue grew by 14.1 per cent to Sh22.23 billion while home fibre revenues rose by 47.2 per cent to Sh1.64 billion.
Safaricom says that it is not yet clear how the pandemic will play out for the telco given the recent surge in infections, the continued zero-rating of Sh1,000 and below M-Pesa transactions and how customers will react when charges are reinstated.It therefore expects earnings before interest and taxes to be in the range of between Sh91 billon and Sh94 billion, a decline of 10.5 per cent to 7.5 per cent.