NAIROBI, Kenya May 26 - East Africa’s most profitable company Safaricom has broken another record, posting a 37 percent growth in its full year pre-tax profit to Sh20.96 billion.
The rise compares to Sh15.3 billion recorded in the 2008 financial year.
In 2009, turnover rose by 19.1 percent to Sh83.96 billion while net income grew by 43.8 percent to Sh15.15 billion.
Announcing the results on Wednesday, Safaricom Chief Executive Officer Michael Joseph attributed the growth to an increase in data revenues, which went up by 72.9 percent.
“Data is where the opportunity comes. Less than 10 percent of Kenyans have access to Internet and we want to play a major part in growing that from 10 to 40 percent,” Mr Joseph said adding that there was real demand for data and the operator was looking to make it as affordable as possible.
He also attributed the growth to successful investments made between 2008 and 2009.
“We believe in investing in this market and I think that can be reflected in our results,” he said adding it was prudent to continue posting positive results if the company was to remain successful.
Safaricom has come under pressure from its competitors who feel it has been using its market dominance to lock out the competition.
This has seen the government step in to regulate the industry by introducing the Information and Communication Regulations of 2010 but has since decided to review the laws.
Also speaking during the investor briefing, Ministry of Information PS Dr Bitange Ndemo admitted that the ministry had made a mistake in hurriedly introducing the new law since they had not considered investments made by operators.
“Yes there were mistakes which I take full responsibility for but we are looking to address this,” Dr Ndemo said.
The ministry has sought the help of an American-based law firm to re-draft the laws which should be complete in the coming three weeks.
The controversial laws revolved around fair competition and equity of treatment which Safaricom has strongly opposed arguing the rules will affect its operations.
Mr Joseph said the operator should not be punished for out-investing its competitors.
“Our industry is not one where you invest once and stop. It is capital intensive and the returns are there if you are ready to do it,” he said.
Through the year, Safaricom sought to diversify its revenue earnings from predominantly relying on voice. This led to M-PESA and Broadband data revenues growing by 137.6 per
The Short Message Service (SMS) earned the operator Sh5.1 billion, M-PESA Sh7.5 billion while fixed Broadband data raked in Sh2.9 billion.
Voice revenues also grew as a result of an increase in active subscribers bringing in Sh63.4 billion although the average revenue per user declined to Sh6 from Sh7.3.
Safaricom’s customer numbers improved by 18 percent to 15.79 million active subscribers. The operator also has 9.5 million M-PESA users. Since its introduction the money transfer solution has moved Sh405.52 billion.
Capital expenditure in 2009 was Sh17.43 billion. In the future, Safaricom is set to invest Sh23 billion in improving its network infrastructure this year.
“I know our network quality is not one of the best but we are working towards improving that especially in areas of growth,” he said.
The company has recommended a dividend of 20 cents per share held.
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