Safaricom of Kenya First-Half Profit Jumps on Data Revenue

  • Income from data surges 41%, voice revenue climbs 3.5%
  • Company sees KES36.5 billion annual profit from 31.9 billion

Safaricom Ltd., Kenya’s biggest company by market value, posted a 23 percent increase in first-half profit as mobile-data revenue surged. The stock advanced the most in three months.

Net income climbed to 18.1 billion shillings ($177 million) in the six months through September from 14.7 billion shillings a year earlier, Chief Executive Officer Bob Collymore told reporters Thursday in the capital, Nairobi. Safaricom, which is 40 percent-owned by Newbury, England-based Vodafone Plc, sees full-year profit at 36.5 billion shillings, compared with 31.9 billion shillings previously.

The number of customers at East Africa’s biggest mobile-phone operator jumped 15 percent to 25.1 million subscribers, which boosted total revenue by 23 percent to 97.2 billion shillings. Income from mobile data services increased 41 percent to 9.16 billion shillings, as earnings from its mobile-money transfer service, known as M-Pesa, climbed 24 percent to 19.4 billion shillings.

“We are seeing about a million customers come into the market every year and we are putting a lot more emphasis on regional initiatives,” Collymore said. “We are becoming a little bit more assertive in our customer acquisition.”

Subscriber Growth

The company is targeting to take in another 750,000 users in the second half, Chief Financial Officer John Tombleson said in an interview, saying there was scope for mobile penetration in the country to grow to 100 percent from 84 percent.

Safaricom shares climbed 4.9 percent to 15 shillings by 11:06 a.m. in Nairobi, bringing its gain so far this year to 6.8 percent. The stock is outpacing Nairobi’s FTSE NSE 25-Share Index, which is down 17 percent this year. The company competes with Telkom Kenya Ltd., a joint venture between the government and Orange SA, and Bharti Airtel Ltd.’s Kenyan unit.

“Their customers numbers are very strong and overall performed really well despite concerns on the economy,” Eric Musau, an analyst at Standard Investment Bank, said after the earnings presentation. “They have also delivered a robust guideline.”

Safaricom booked a 690 million-shilling loss on its foreign-exchange trading activities. Kenya’s currency has been on the back foot for most of the year as the dollar strengthened globally. The weakness has forced the central bank to increase rates to check rising prices, raising concern that it may cool growth in East Africa’s biggest economy.

Safaricom said issuance of a pay-television license the company needs to begin the service is “imminent.”

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