Safaricom has recorded a 10 per cent drop in Half Year profit after tax for the period ending in September 2022. 

In the Half Year results announced on Friday, its net profits fell to Sh33.5 billion based on its spending on launching Safaricom Ethiopia last month.

According to the telecommunications company, the revision of its mobile termination rates as well as excise duty increase on SIM cards.

Safaricom CEO Peter Ndegwa also blamed the performance on the "prevailing macroeconomic challenges leading to a tough operating environment in Kenya and elevated pressure on consumer spending."

In the period under review ended September 30, 2022, Safaricom recorded a 4.6 per cent growth in service revenue of Sh144.8 billion.

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 “We are pleased with the commercial progress made in Ethiopia since launch of operations early last month. Most importantly we are enthusiastic on the growth opportunity in Ethiopia, with over 740,000 customers so far and 20,000 new customers joining the network daily. We are also encouraged by data and voice usage levels with 711 MBs average usage per active data customers and 30 Minutes of Use per active voice customers for the month of October,” said Ndegwa.


Ndegwa said Safaricom had poured over USD598 million in its Ethiopia operations and was encouraged by the early uptake of services, great customer feedback on the quality of its data experience and the revenue contribution by Safaricom Ethiopia.

He added that the Ethiopia Government had undertaken to award Safaricom with the mobile money license which will boost it's commercial efforts to drive financial inclusion and digital acceleration for Ethiopian customers.

During the period under review, Safaricom's voice service revenue dropped by 3.8 per cent to Sh39.88 billion; Mobile Data revenue grew by 11.3 per cent to Sh26.30 billion, while M-Pesa income went up by 8.7 per cent to Sh56.86 billion.

“Given the impact of the Mobile Termination Rates from Sh0.99 to Sh0.58, a slowdown in business operations due to the elections period, increase in excise duty on sim cards and mobile phones and a failed rain season leading to more economic hardship for the country, Safaricom has done very well to deliver solid revenue growth and a net income that is within the expected range,” said Ndegwa.

Dilip Pal, Peter Ndegwa and Stephen Kiptiness. 

Safaricom says it expects increased uptake and growth in customers to drive  the second half momentum but admits that economic, regulatory and tax hurdles will continue to impact its revenue performance.

“The board is pleased with the results delivered for first half of the financial year and remain committed in protecting shareholder wealth, by ensuring management puts our customers first, continuously innovating to offer relevant products, services and solutions to meet their needs. We remain mindful of the sustained consumer wallet pressure with rising inflation, the highest in five years at 9.2 per cent in September 2022 and high commodity prices,” noted John Ngumi, Chairman, Safaricom Board of Directors.