It’s been a tough year for most businesses in Kenya – but Safaricom seems to have defied many challenges to record Ksh68.7 billion in net profit for the year 2020.
Although this is 6.8 percent lower than the Sh73.6 billion recorded in the previous year, it is quite a performance given that the whole of 2020 was ravaged by the Coronavirus pandemic.
Safaricom which is Kenya’s most profitable company realised Ksh250.3 billion in revenues for the same period. Most of this went into tax and other operating costs leaving the company with Ksh68.7 billion in it’s purse.
Safaricom Chief Executive Peter Ndegwa said that the tough business environment had affected even them – adding that it was a tough year.
“Covid-19 altered the environment for all businesses. We were not spared. Perhaps the most impactful was facilitating reduced cash handling through temporary zero-rating all transactions below Sh1,000,” he noted.
Safaricom took certain steps at the height of the pandemic in 2020 to try and cushion its customers from the harsh effects of the pandemic.
For instance, over 1.7 billion transactions valued at Sh4.4 trillion were zero-rated during this period.
“Following return to charging on zero rated M-Pesa transactions, we also reduced our M-Pesa tariffs by up to 45 percent for lower value transaction bands. We also made it easier for our customers to pay hospital bills by zero-rating Paybill costs to health facilities across the country,” Ndegwa said.
Safaricom’s mobile money platform, M-Pesa accounted for 33 percent of the total service revenue – and recorded 2.1 percent drop in revenues to Sh82.64 billion. Voice dropped by 4.6 percent to register revenue of Sh82.55 billion.
“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,” noted Ndegwa.
Adding: “Our immediate focus in the year has been to ensure that network capacity, operations and financial services are prioritized to limit disruptions.”
In 2020 Safaricom declared for the first time, an interim dividend of Sh0.45 per ordinary share held amounting to Sh18.03 billion.
The board has now declared a final dividend per share (DPS) of Sh0.92 dividend per share amounting to Sh36.86 billion, bringing the total dividend pay out to Sh56.09 billion.