Safaricom announced a profit dip of 6 per cent due to the challenges brought about by the Covid-19 pandemic slowdown.
The Giant Telco borrowed short-term bank loans amounting to Sh24.7 billion in the half year ended September from KCB Bank among others to fund its dividend payments and infrastructure investments, Business Daily Reports
Safaricom has complained before about the removal of fees on M-Pesa transactions of up to Sh1,000, which it says has dented it margins.
It is the first time in nine years Kenya’s most profitable firm is reporting a fall in earnings. The loans came in a six-month period when Safaricom’s net profit dropped to Sh33 billion from Sh35.1 billion, hurt by the impact of the coronavirus crisis.
The move to take more loans, seen as a cash flow management measure, raised the telco’s debt load to a new high of Sh32.7 billion.
The loan is not a burden as such to Safaricom, as bankers rivy to the information said the profitable Telco is able to retire the debt in less than one year.
Safaricom paid a dividend of Sh1.4 per share or a total of Sh56 billion for the year ended March in the last two weeks of August in a deliberate move, according to the Telco, to support shareholders, including the government, which needed funds to combat the Covid-19 pandemic.
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