KENYA: Safaricom's profit jumps 37 per cent

Record ID: 361436

  • Title: KENYA: Safaricom's profit jumps 37 per cent
  • Date: 26th May 2010
  • Summary: NAIROBI, KENYA (MAY 26, 2010) (REUTERS) VARIOUS VARIOUS OF SAFARICOM BUILDING IN NAIROBI NEWS CONFERENCE (SOUNDBITE) (English) MICHAEL JOSEPH, CHIEF EXECUTIVE SAFARICOM SAYING: "As you can see our revenue has grown to 84 billion (1.5 billion US dollars). As I said now, we are now over a billion dollar company, 19 per cent growth, our margin grew. At the end of last ye
  • Embargoed: 10th June 2010 13:00
  • Keywords:
  • Location: Kenya
  • Country: Kenya
  • Topics: Communications,Finance
  • Reuters ID: LVAM2GW8VYBN6MVUT81ZIVFC38M
  • Story Text: Safaricom, Kenya's largest telecoms operator, which has the biggest market value in east Africa, has posted a 37 percent rise in full-year pretax profit to 20.97 billion shillings (262 million US dollars) for the year to March.
    Safaricom's successful money transfer product helped the company realise a 10 percent increase in Earnings Before Interest and Tax (EBITDA) in six months from September.
    "As you can see our revenue has grown to 84 billion (1.5 billion US dollars). As I said now, we are now over a billion dollar company, 19 per cent growth, our EBITA margin grew. At the end of last year we were at 39.7 per cent EBITDA margin. We are now at 43.6 per cent, which is something we promised the investor," Safaricom's chief executive, Michael Joseph told a news briefing.
    Safaricom, part-owned by British operator Vodafone, said the greatest growth opportunities lay in data services.
    "We have 50 per cent penetration right now. We still have a long way to go, and we have a lot of faith, and a lot of confidence in still future growth in this business in Kenya. Not just on the voice side, which is there of course, because we had 50 per cent, and I am sure that 65 per cent and 70 per cent is attainable, but also on the data side. Data is where the opportunity comes. Less than 10 per cent of Kenyans have access to the internet. Our objective during this coming year is going to be .... we want to be part of increasing that penetration from 10 to 40 per cent, we want to play a major part in that," Joseph said.
    Telecom executives view data as the next big area of growth as the voice market matures.
    In addition to offering third-generation (3G) services, Safaricom runs a money transfer service, M-Pesa.
    "Registering Mpasa customers doesn't translate into revenue, unless they are active. So we have 9.5 million, and I am sure by the end - in a few months there will be 10 million active Mpesa users. And the number of transactions is increasing as well, the number of transactions per subscriber per month is increasing and the actual amount that they are transacting," Joseph said.
    Safaricom this month introduced a product that can link M-Pesa users with an Equity Bank account, which Joseph said would be a runaway success.
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