Safaricom Full-Year Profits Drop 23%

Kenya's Safaricom has seen a twenty-three percent fall in its full year profits to Kshs 10.54 billion (US$136 million), from Kshs 13.85 billion (US$179 million) in the last fiscal year. The company said that the drop was due to increased depreciation in line with the increased capital investment. Revenues however were up by 14.8% to Kshs 70.5 billion (US$910 million).

The company said that the effects of the post election violence, high inflation driven by food and oil prices, the global economic crisis and the volatile foreign exchange rates resulting in the weakening of the shilling all combined to reduce the spending power of our customers and drive up operating costs. Competition increased significantly with the entry of two new operators resulting in increasing tariff pressure and a corresponding reduction in tariffs of up to 40%.

Blended Average Revenue Per User (ARPU) for PrePay and PostPay was Kshs 475 (US$6.13). ARPU reduced in the year as a result of increased penetration and lower average tariffs. This was however compensated by increased average minutes of use per month of 57.5 from 52.8 in the previous year.

As of 31 March 2009 the Company increased the total subscriber base to 13.4 million consisting of 13.3 million prepaid and 112,200 post-paid subscribers. This compared to 10.2 million subscribers as of 31 March 2008 a growth in the year of 30.6%.

The staff headcount increased by 59.7% to 2,387 (cost increase 31.7%).

Following a stock market floatation last year, the Kenyan government owns 35% of Safaricom, 25% is floated on the stock exchange and 40% is held by Vodafone Kenya Ltd - which in turn is 87.5% owned by Vodafone Group and 12.5% owned by a mystery company, Mobitelea.

Posted to the site on 22nd May 2009