Safaricom’s net profits jump 39pc to hit $208 million

Tuesday May 14 2013

Kenya’s leading mobile company Safaricom has posted a 38.9 per cent jump in net profits to hit Ksh17.5 billion ($208 million) for the year ending March 2013 riding on a rise in data and voice revenues.

While announcing the results on Tuesday the firm’s chief executive Bob Collymore said total revenues rose 16 per cent to Ksh124.3 billion ($1.48 billion), with voice revenues rising 12.62 per cent to Ksh77.6 billion ($920 million) and data grew by 20.88 per cent to Ksh6.32 billion ($80 million).

Revenues from M-Pesa, the mobile money transfer service, grew by 29 per cent to Ksh21.84 billion ($260 million).

“The performance was driven by improved network quality, recovery from damaging price wars, convenient airtime distribution and customer promotions,” said Mr Collymore.

Analysts say the result was impressive given that there was expectations that the telcom company would face challenges on some of its business segments.

“Overall, we were impressed by the performance with SMS revenue coming in particularly strongly despite our initial thoughts that the business would start to stagnate. Management have indicated that the Earning Before Interest Tax Depreciation and amortisation (EBITDA) margin attained for this year is sustainable going forward, which leads us to believe that they feel well positioned from a competitive perspective,” said analysts at Standard Investment Bank (SIB).


The company’s phone sales dropped 17 per cent from Ksh5.9 billion ($70 million) to Ksh4.9 billion ($58 million) a factor that the company said was driven by a change in strategy.

“We are now focusing more on selling smartphones and leaving our dealers to sell the 2G phones,” said Mr Collymore.

Analysts at Citigroup, the US investment bank, say the focus on smartphones is driven by the need to grow the data business.

Safaricom: Key Highlights for the year ended March 31, 2013

Mar-13 ($m)

Mar-12 ($m)

% Growth





Cost of sales




Gross profit




Operating profit




Net financing costs




Share of associate








Source : Old Mutual Securities, Safaricom

  • Revenues grew by 16.2 per cent to Ksh124.3 billion ($1.48 billion) supported by customer growth and increasing ARPU in voice, strong growth in data and M-Pesa. M-Pesa revenue increased by 29.5 per cent to Ksh21.8 billion ( $260 million) while fixed and mobile data revenue grew by 21 per cent to Ksh6.3 billion ($80 million) on increased data usage and growing customer base (up 57 per cent to 7.1 million customers).
  • Collectively, data contribution to the revenues increased by 29 per cent to Ksh40.4 billion ($481 million). The recently launched M-Shwari product has 1.2 million active customers. Voice revenues stood at Ksh77.7 billion (+12.6 per cent), due to a 5.7 per cent growth in ARPU to Ksh336.57 ($4.01 ) as a result of 2 per cent growth in customer base to 19.42 million. 
  • EBITDA advanced by 31 per cent to Ksh49.2 billion ($590 million). EBITDA margin stood at 39.6 per cent, up 4.5 per cent compared to the previous year.
  • Capital expenditure (CapEx) stood at Ksh24.88 billion ($300 million) from Ksh25.74 billion ($310 million).

Safaricom market share stands at over 77.5 per cent by subscriber numbers.