Safaricom Reports 16% Jump in Full-Year Profits

Kenya's Safaricom has reported a 16 percent jump in full year profits to Sh13.9 billion ($223.7 million) as its declared subscriber base jumped by two-thirds. Pretax profit came in at Sh19.9 billion ($321 million). Sales jumped to Sh61.4 billion, from Sh47.5 billion as subscriber numbers rose by 68 percent to 10.2 million at the end of March 2008.

The subscriber figure is interesting as the company has been coy about releasing details of how many of its subscribers are classed as active - preferring to simply publish a total figure for all the SIM cards sold. According to the sale prospectus for the recent share sale by the Kenyan government, the company ended last year with 9.2 million subscribers, consisting of 9.1 million and 113.5 thousand prepaid and postpaid subscribers respectively. While Safaricom says that it classes an active subscriber as one who made a billable action within the past 30 days - the company noted in the prospectus that its declared subscriber base includes both active and inactive subscribers.

The true number of active subscribers is not known. The news is not financially significant, as the company revenues are not (presumably) inflated by these non-customers and indeed clearing them off the books would result in a boost for the more interesting ARPU figure which so excites the financial markets.

Preliminary figures released last month from the sale of shares in Kenya's Safaricom pulled in some Sh191 billion (US$3.3 billion) in bids from local and international investors - substantially exceeding the expected Sh50 billion (US$845 million) that government had hoped to raise.

Following the floatation - the Kenyan government will own 35% of Safaricom, 25% will be floated on the stock exchange and 40% will be held by Vodafone Kenya Ltd - which in turn is 87.5% owned by Vodafone Group and 12.5% owned by the controversial mystery company, Mobitelea.

Both the Government of Kenya and Vodafone Kenya Limited have agreed not to sell any further shares for a period of at least 180 days following the privatisation.

Posted to the site on 27th May 2008