Safaricom Plc (NSE: SCOM) 1H21 Earnings Note
Safaricom Plc (NSE: SCOM) announced a 6.1% y/y drop in 1H21 Earnings per Share (EPS) to KES 0.83 in line with our expected EPS of KES 0.82. The slow performance was primarily attributed to 14.5% y/y decline in M-Pesa revenue (-14.8% y/y expected), faster-than-expected 6.5% y/y decline in voice revenue (-3.1% y/y expected), positive (14.1% y/y) mobile data revenue growth as fixed data surprised on the downside (-0.2% y/y). Consequently, service revenue fell in line with our expectations (-5.3% y/y). Efficiencies were the major driver of bottom-line growth with operating costs down 10.6% y/y steadying operating profit (EBIT) at -3.1% y/y. With performance in line with our projections, we maintain our HOLD rating at a fair value estimate of KES 31.34.
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