Kenya's Safaricom sees lower annual core earnings on pandemic hit
INTERNATIONAL - Safaricom, Kenya's biggest telecoms operator, said on Monday it expects core earnings to drop by 7-10.5 percent in the year ending March 2021, hurt by the impact of the coronavirus crisis.
The firm, which is part owned by Britain's Vodafone and South Africa's Vodacom, posted a 4.8 percent decline in its first-half service revenue to 118.41 billion shillings (R16.93 billion).
Full-year core earnings, or earnings before interest and taxes, are expected to come in at 91-94 billion shillings, a 7-10.5 percent drop from the prior year, said Chief Executive Officer Peter Ndegwa.
The first-half decline was driven by a drop in revenue from its mobile financial services, M-Pesa, and voice calls.
In March, Safaricom eliminated charges on peer-to-peer transfers of amounts below 1000 shillings to facilitate cashless transactions and help curb the spread of the coronavirus through banknotes, cutting its revenue from the service.
Revenue from provision of internet services increased, but were not sufficient to offset the drop in M-Pesa and voice calls, the company said at an online investor briefing.