24th May 2016
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Company Data
 
Safaricom Ltd.
http://www.safaricom.co.ke
Par Value:                  0.05/-
Closing Price:           17.20
Total Shares Issued:          40065428000.00
Market Capitalization:        689,125,361,600
EPS:             0.95
PE:                 18.105
 

FY Service revenue 177.784089b vs. 156.246631b +13.784%
FY Handsets and other revenue 8.621317b vs. 7.117490b +21.129%
FY Total revenue 195.685224b vs. 163.364121b +16.681%
FY Voice Revenue 90.8b versus 87.37b +3.93%
FY MPesa Revenue 41.5b versus 32.63b +27.18%
FY SMS Revenue 41.50b versus 32.63b +10.59%
FY Mobile Data Revenue 21.15b versus 14.82b +42.71%
FY Direct costs [62.310003b] vs. [56.708576b] +9.878%
FY Other expenses [41.260953b] vs. [36.039990b] +14.487%
FY EBITDA 83.066273b vs. 71.191159b +16.681%
FY Depreciation, impairment and amortisation [27.942546b] vs. [25.570159b] +9.278%
FY Profit before taxation 55.762505b vs. 46.149545b +20.830%
FY Total Comprehensive income for the period 38.104290b vs. 31.871303b +19.557%
Basic & diluted EPS 0.95 vs. 0.80 +18.750%
Dividend per share 0.76 vs. 0.64 +18.750%
Shareholders funds 116.738947b vs. 104.276531b +11.951%
Cash & cash equivalents at the end of the period 6.109493b vs. 11.916371b -48.730%

Accompanying Commentary

+7.8% increase in total Customer Base to 25.2m
19.8% increase in 30 day active MPesa Customers to 16.6m
Safaricom has a 64.7% subscriber market share
Service Revenue +13.8% grew +15.2% in 2nd Half
Voice Revenue 51.1% of Service Revenue
NonVoice Revenue +26.3% now represents 48.9% of service revenue from 44.1% last year
Mobile Data Customers 14.1m +21.5%
7.9m Customers on 3G and 4G [0.7m on 4G Handsets]
Zero Gearing
FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.

Some of My Tweets from the Presentation

@safaricomltd @bobcollymore serves up some seriously tasty FY Earnings
https://twitter.com/alykhansatchu/status/730292234042626048

We are issuing 1 Loan every second via MShwari and @KCBGroup MPesa @bobcollymore #SafaricomFYResults
https://twitter.com/alykhansatchu/status/730273044204228608

.@SafaricomLtd Mobile Data revenue growth of +42.7% #safaricomresults
https://twitter.com/alykhansatchu/status/730270125669134336

@SafaricomLtd #SafaricomFYResults We have started to leverage big Data 14.1m mobile data Users Mobile Usage up 112%
https://twitter.com/alykhansatchu/status/730266049711620096

Voice Revenue +3.9% minutes of use +11% @SafaricomLtd #safaricomfyresults
https://twitter.com/alykhansatchu/status/730269075113422848

Conclusions

a seriously strong set of Results what with FY EPS +18.75% and FY Dividend +18.75%.
Voice at +3.93% is a seriously good outcome.
SMS Revenue was a Bullish Outlier with a +10.59% gain [Sportspesa refers].
Data continues to expand exponentially +42.71% with a Triple digit % gain in Data Usage.
There are not many Companies in the World able to deliver these kinds of numbers and raise the dividend by such an amount.
Interesting FY EBITDA Guidance range has been tilted lower
FY 17 Guidance we expect EBITDA for FY17 to be in the range of 89b-92b.

H1 Voice revenue 45.19bn vs 43.67bn +3.48%
H1 Messaging revenue 7.98bn vs 7.17bn +11.29%
H1 Mobile data revenue 9.16bn vs 6.50bn +40.92%
H1 Fixed service revenue 1.86bn vs 1.49bn +24.83%
H1 MPESA revenue 19.35bn vs. 15.59bn +24.12%
H1 Other service revenue 1.37bn vs 1.18bn 16.10%
H1 Service revenue 84.91bn vs 75.60bn +12.31%
H1 Handset and other revenue 3.87bn vs 3.74bn +3.48%
H1 Construction revenue 8.44bn vs -
H1 Total revenue 97.22bn vs 79.34bn +22.54%
H1 Other income 0.08bn vs 0.55bn -85.45%
H1 Direct costs [30.02bn] vs [28.92bn] +3.80%
H1 Construction costs [8.44bn] vs -
H1 Contribution margin 58.84bn vs 50.97bn +15.44%
H1 Contribution margin % 66.23% vs 63.80% +2.43%
H1 Operating costs [19.22bn] vs [17.36bn] +10.71%
H1 Forex loss on trading activities [0.78bn] vs [0.08bn] +875%
H1 EBITDA 38.84bn vs 33.53bn +15.84%
H1 EBITDA margin 43.75% vs 41.97% +1.78%
H1 Depreciation. impairment and amortisation [13.55bn] vs [12.59bn] +7.63%
H1 Net income 18.08bn vs 14.71bn +22.91%
H1 EPS 0.45 vs 0.37 +22.91%
H1 Cash and cash equivalents 21.24bn vs. 30.49bn -30.34%
H1 Debt corporate bond [4.49bn] vs. [12.00bn] -62.58%
H1 Total net cash [debt] 13.16bn vs. 18.02bn -26.97%
H1 Operating free cash flow 17.43bn vs. 23.03bn -24.41%
H1 Free cash flow 9.52bn vs. 15.48bn -38.50%

FY Guidance

AlyKhan Satchu @SafaricomLtd FY Guidance Net Income upgrade to 35.5b 36.5b versus 32b 34b previously
https://twitter.com/alykhansatchu/status/662138793831604225

A Selection of Tweets from the Briefing

Safaricom Limited Voice revenue grew by 4% and non voice revenue by 24%. #SafaricomHYResults
https://twitter.com/SafaricomLtd/status/662137637927526400

Think of @SafaricomLtd as a Platform says @bobCollymore #SafaricomHYResults We think ECommerce has a big Future
https://twitter.com/alykhansatchu/status/662144336969224193

Safaricom Limited @SafaricomLtd Voice revenue grew by 4% and non voice revenue by 24%.
https://twitter.com/SafaricomLtd/status/662137637927526400

thibaud rerolle #SafaricomHYResults data usage grew 78% smartphones +33% to above 4 millions
https://twitter.com/thibaudrerolle/status/662133296294445056

@SafaricomLtd 78% increase in mobile data usage offset 40% decline in price #SafaricomHYResults
https://twitter.com/alykhansatchu/status/662136087268192256

Conclusions

These were really strong numbers plain and simple. Look at the Revenue acceleration +22.54% to 97.22b

Full Year Earnings through 31st March 2015 versus through 31st March 2014
Full Year Revenue 163.364121b versus 144.672477b +12.9%
Full Year Direct costs [56.708576b] versus [51.963714b] +9.1%
Full Year Other Expenses [36.039990b] versus [31.892090b] +13%
Full Year Earnings before Interest Taxes depreciation and amortisation 71.191159b versus 60.943298b +16.8%
Depreciation impairment amortisation [25.570159b] versus [25.787231b] [0.8%]
Full Year Profit before Tax 46.149545b versus 34.984430b +31.9%
Full Year Profit after Tax 31.871303b versus 23.017540b +38.5%
Full Year Earnings Per share 0.80 versus 0.57 +38.5%
Full Year Dividend Per share 0.64 versus 0.47 +36.2%
Cash at end of Period 14.030309b

Key Highlights

Customer Numbers +8.3% to 23.35m
Mobile data Customers active in the last 30 days +21.2% to 11.59m
MPesa Customers active in last 30 days +14% to 13.86m
Voice revenue increased +3.7% to 87.41b
SMS Revenue +14.8% to 15.63b
Mobile Data Revenue +59.2% to 14.82b
Fixed service revenue +21.7% to 3.13b
MPEsa revenue +22.8% to 32.63b [now 20% of Total Revenue]
Non Voice service Revenue [MPesa,SMS,Broadband,other service revenue] now 42.1% of total revenue from 37.4%
EBITDA +16.8%
Launched 4G Network
By 31st March we had 4.3m customers on 3G enabled devices of which 3.4m were smartphones

A Selection of Tweets from #Safaricomresults

Bob Collymore @bobcollymore 13% Revenue growth to 156bn. Net profit up 38% to 32bn. FCF up 21% to 28bn. EBITDA up 17% to 71bn #safaricomresults
https://twitter.com/bobcollymore/status/596171529051836416

@alykhansatchu Brilliant FY numbers @bobcollymore @SafaricomLtd Mobile Data lifting off big
https://twitter.com/alykhansatchu/status/596193397339193344

Safaricom Limited @SafaricomLtd #SafaricomResults Financial performance highlights: 8.3% growth in subscribers. 12.9% growth in revenue.
https://twitter.com/SafaricomLtd/status/596173710941417474

@Wanjala @alykhansatchu stopped tweeting just in time to cajole the rest of the crowd to ask investor questions
https://twitter.com/Wanjala/status/596178783809445888

@alykhansatchu .@SafaricomLtd FY Dividend increased +36% FY Revenue +13% #safaricomresults @NSEKenya FY Mobile Data revenue +59%
https://twitter.com/alykhansatchu/status/596180547409416192

@alykhansatchu The Big Box @SafaricomLtd #safaricomresults
https://twitter.com/alykhansatchu/status/596178256933552128

Conclusions

These Results beat the already high bar of expectations by a wide margin.
Non voice revenue expanded from 37.4% to 42.1% of Total Revenue Year on Year and accelerated +27%.
Voice slowed down H2.
A dividend hike of +36.2% is in the finally analysis a powerful statement.
The Share price is headed higher

First Half Earnings for the Period ended 30 September 2013

First Half Earnings through Sep 30 2014 versus through Sep 30 2013
H1 Revenue 79.335723b versus 69.201287b +14.6%
H1 Direct Costs [28.917853b] versus [24.792624b] +16.6%
H1 Other Expenses [17.442953b] versus [15.555332b] +12.1%
EBITDA 33.527407b versus 28.860007b +16.2%
H1 Profit Before Taxation 21.106521b versus 15.908812b +32.7%
H1 Profit After Tax 14.711449b versus 11.260242b +30.6%
H1 EPS 0.37 versus 0.28 +32.1%
H1 Cash at end of reporting Period 30.489995b versus 19.808642b

Commentary and Key Highlights
Customer Numbers 21.85m versus 20.82m +4.9%
Mobile Data Customers active in the last 30 days 10.51m versus 8.48m +23.9%
MPesa Customers active in the last 30 days 12.80m versus 11.55m +10.8%
Revenue accelerated +14.6% to 79.34b
Voice Revenue 43.67b versus 41.04b +6.4%
SMS Revenue 7.17b versus 6.35b +12.9%
Mobile Data Revenue 6.5b versus 4.25b +52.9%
Fixed Service Revenue 1.49b versus 1.22b +22.1%
MPesa Revenue 15.59b versus 12.50b +24.7%
Non Voice Service Revenues increased to 40.2% of Total Revenues versus 36.4%
Free Cash Flow 15.5b +12.7%
By End September retail payments had surpassed 6.6b a month
Voice commands 78.1% market share of Voice Traffic
Lock Box Service
3.1m Smartphone Users on Network
Voice ARPU -1.13
SMS ARPU +4.32
MPesa ARPU +10.84
Mobile Broadband ARPU +18.64
DATA [SMS,BROADBAND,MPESA] 38.76% of Total Revenue

@alykhansatchu Very attractive figures @KuiKinyanjui @bobcollymore
@SafaricomLtd H1 EPS +32.14% Total Revenue +14.6%
pic.twitter.com/pVH5R4SoiW

@alykhansatchu @SafaricomLtd #SAFARICOMHYRESULTS Financials H1 EPS
0.37 versus 0.28
pic.twitter.com/3HWy1qaF7j

@SafaricomLtd @alykhansatchu is here, ready for the
#SafaricomHYResults. pic.twitter.com/bujDKnHw3C

Conclusions

These Results beat the Street by a wide margin. The Outlier is Mobile
Data and 3.1m Smartphones on the Network is to set to accelerate that
further. MPesa might see some margin compression H2 but these were
muscular results.

FY Revenue 144.67b versus 124.29b +16.4%
FY Voice Revenue 86.3b versus 77.33b +11.6%
FY Messaging Revenue 13.62b versus 10.15b +34.19%
FY Mobile Data Revenue 9.31b versus 6.62b +40.63%
FY Fixed Service Revenue 2.57b versus 2.11b +21.8%
FY M-Pesa Revenue 26.56b versus 21.84b +21.61%
FY Direct Costs [51.96b] versus [47.17b] +10.15%
FY EBITDA 60.94b versus 49.24b
FY PAT 23.02b versus 17.54b +31.24%
FY EPS 0.57 versus 0.44 +29.55%
FY Dividend 0.47 versus 0.31 +51.61%
Dividend Yield 3.65%
Free Cash Flow 22.69b versus 14.51b

Company Commentary

Strong growth of 28% in non-voice service revenue, now 36% of total revenue
11.1% growth in customer base to 21.6m customers (19.4m in FY13)
Voice service revenue growth of 11.6% and non-voice service revenue growth of 27.8%
Average blended rate per minute is Kshs 2.88 for national outgoing calls
2.6% increase in outbound (on,off net)calling time to 98.2 minutes per customer per month
9.0% decrease in inbound calling time to 12.8 minutes per customer per month

SAFARICOM LIMITED ANNOUNCES AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2014.
KEY HIGHLIGHTS
Solid growth in all revenue streams with continued significance of non voice revenue in revenue generation
Total revenue increased by 16% to Kshs 144.7bn.
Service revenue growth of 17% to Kshs 138.4bn of which Voice service revenue grew by 12% to
Kshs 86.3bn and Non voice service revenue increased by 28% to Kshs 52.1bn.
Customer base grew by 11% to 21.6m.
SMS revenue grew by 34% to Kshs 13.6bn.
MPESA revenue increased by 22% to Kshs 26.6bn.
15% increase in 30 day active MPESA customers to 12.2m 56% of our total customer base.
Mobile data revenue grew by 41% to Kshs 9.3bn.
34% increase in 30 day active mobile data customers to 9.6m 44% of our total customer base.
Fixed data revenue growth by 22% to Kshs 2.6bn.
Strong financial and commercial performance
24% growth in EBITDA to Kshs 60.9bn with an EBITDA margin of 42.1% up 2.5ppt.
Profit after tax increased by 31% to Kshs 23.0bn.
Free cash flow has improved by 56% to Kshs 22.7bn.
Capital expenditure for the period increased by 12% to Kshs 27.8bn.
Bob Collymore, Safaricom Limited CEO commented:
Once again we have demonstrated our relentless dedication to growing shareholder returns through superior commercial performance across our entire service portfolio as evidenced by our strong financial results. We continued to deliver on our goal to transform lives by providing unmatched services; we made huge improvements in our network quality; and we deepened financial inclusion with the introduction of Lipa na MPESA on the MPESA platform.
We have grown our total revenue by 16% to Kshs 144.7bn through focusing on providing quality services that resulted in double digit growth across all our service revenue streams. Voice service revenue which now stands at 60% of total revenue grew at 12% while non-voice service revenue which accounts for 36% of total revenue, sustained its growth trajectory with a 28% increase to Kshs 52.1bn driven mainly by Data and MPESA. Devices and other revenue contributes 4% of total revenue.
Mobile penetration in Kenya stood at 76.9% with Safaricom recording the largest subscriber share of 67.9%. Our customer base has grown by 11% to 21.6m while churn rate dropped to 19% as a result of efforts centered on retaining and rewarding our loyal customers.
Voice service revenue grew to Kshs 86.3bn and accounted for 62% of our service revenue (down from 66% in the previous year). This growth was supported by our loyal customer base attracted by a superior network experience, convenient airtime distribution and attractive consumer propositions and promotions such as the Tetemesha campaign.
Messaging revenue once again posted an impressive performance having increased by 34% to Kshs 13.6bn which represents 10% of our service revenue. This was driven by increased usage from affordable SMS bundles and SMS based promotions such as Bonyeza Ushinde.
Page 1 of 6
News Release
MPESA, now contributing 18% of total revenue, continues to be a significant driving force for our growth. This was driven by a 15% increase in 30 day active MPESA customers to 12.2m as well as an increase in the average number of transactions per customer. In the year, we expanded our MPESA agent outlets to 81,025 thereby promoting accessability of the service to our customers. With its launch, the Lipa na MPESA service has enabled cashless merchant payments and facilitated trade between businesses and their customers while improving business efficiency. As at 31 March 2014 the service had 122,000 registered merchants, of which 20% (24,137) were active on a 30 day basis.
Mobile data revenue grew at an impressive 41% driven by an increased uptake of affordable data bundles and a 34% growth in 30 day active mobile data customers to 9.6m. 3.1m customers are on 3G enabled devices of whom 1.9m are on smartphones. Fixed data revenue increased by 22% to Kshs 2.6bn on the back of 4% growth in fixed data customers, and a 16% increase in fixed service ARPU.
We continue to focus on our Best Network in Kenya program with Kshs 27.8bn invested in the network during the year, our goal being to provide the best customer experience through improving our network quality, capacity and coverage. We have increased the population coverage of our 2G and 3G networks, completed network modernization in six key cities and rolled out fibre to 50% of our base stations in Nairobi. In October 2013, we commissioned independent drive tests to measure key quality metrics such as dropped calls, voice quality and data speeds, these tests show that our network delivers the best data services and comparative voice services.
Direct costs grew at 10% but at a lower rate than the 16% growth in revenue. This in turn resulted in an improvement in the contribution margin to 64%.
Our operating costs stood at 22% of total revenue as we continue to explore further cost reduction initiatives focused on transmission costs, network operating costs (including fuel) and IT operational costs.
For another consecutive year, we have delivered robust results and ensured value for our shareholders supported by growth across all our revenue streams. This increase in revenue coupled with cost efficiency has driven the EBITDA margin to 42.1%, a 2.5ppt improvement.
Free cash flow has increased by 56% to Kshs 22.7bn as a result of the strong trading results and positive working capital.
In light of the strong financial performance in the past year, the Board recommends a dividend of Kshs 0.47 per share an increase of 52%. Pending approval by shareholders we will pay out a dividend of Kshs 18.83bn, which represents 82% of our net income, for the year ended 31 March 2014; once again, the largest dividend in Kenyan history.

Conclusions

These are really strong results and that is evidenced in the +51.61% uplift in the Dividend which is the loudest Signal in the Noise.


H1 Revenue 69.201287b versus 59.118149b +17.1%
H1 Cost of Sales [30.215501b] versus [27.529922b] +9.8%
H1 Gross Profit 38.985786b versus 31.88227b +23.4%
H1 Operating Expenses [22.829488b] versus [19.206278b] +18.9%
H1 PBT 15.908812b versus 11.509998b +38.2%
H1 PAT 11.260242b versus 7.7774849b +44.8%
H1 EPS 0.28 versus 0.19 +47.4%

Company Commentary

Customer Numbers +8.3% to 20.82m as at September 2013
Mobile Data Customers who were active in the last 30 days +51.7% to 8.48m versus 5.59m
MPesa Customers 11.55m as at September 2013
Voice Revenue +12% to 41.92b [63.3% of Total Revenues versus 66.7%]
SMS Revenue +48.7% to 6.35b [9.6% of Total Revenues versus 7.6%]
Data Revenue +37.4% to 5.47b [8.2% of Total Revenues versus 7.1%]
MPESA Revenue +19.9% to 12.5b [18.9% of Total Revenues versus 18.6%]
MPESA,SMS,Data revenues +35.1% of Total Revenues versus 31.6%
EBITDA increased by 29.4% to 28.85b
Total Borrowings as at 30 September stood at 12b.
Cash and Cash Equivalents stood at 19.81b.
Net Cash 7.81b.
Free cash flow has improved by 167% to Kshs 13.7bn.
Improved guidance for the full year
Free cash flow expected to be in the range of Kshs 20bn to Kshs 21bn. Calls To Government of Kenya to fast track LTE Frequency Allocation
Safaricom calls for allocation of additional frequency spectrum resources to facilitate nationwide LTE rollout;
Safaricom commits to providing free broadband access to public schools identified as part of the Governments laptop project for primary school children if LTE spectrum is alloctated by GoK.

A Selection of my Tweets from yesterday

Nick Sato @SatoNick15h
@bobcollymore light moment says that the chatitude bundle was mainly targeted for @alykhansatchu..SafaricomHalfYearResults2013
AlyKhan Satchu @alykhansatchu15h
We see a need to upgrade our FY free Cash Flow Number says @Bobcollymore 20 21b from 17.5b
AlyKhan Satchu @alykhansatchu15h
@SafaricomLtd MShwari 2.4m active Customers MPesa increased outlets by 33,316 during the Year
AlyKhan Satchu @alykhansatchu15h
Safaricom 1.5m smartphones on Network says @BobCollymore http://www.twitpic.com/dk3ujz
AlyKhan Satchu @alykhansatchu16h
Mobile Data has hit an inflexion Point says CFO @SafaricomLtd http://www.Mobile Data +43.9%
AlyKhan Satchu @alykhansatchu16h
Safaricom reports +47.4% Acceleration in H1 2013 Earnings Per Share +38.2% PBT http://www.twitpic.com/dk3ujz @bobcollymore

The free cashflow will get everyone excited because it means they are raising the dividend payout, AlyKhan Satchu, chief executive officer of Nairobi based Rich Management Ltd., said in an interview. Businessweek
http://www.businessweek.com/news/2013-11-05/safaricom-first-half-profit-surges-as-data-share-of-sales-grows

@bobcollymore #Safaricom H1 2013 Earnings
http://www.twitpic.com/dk3ujz

Conclusions

Safaricom have again exceeded the Top End of Consensus estimates.
I think Mobile Data is set to turn parabolic.
I have a Price Objective of 12.00 now.

FY 2013 Earnings through 31st March 2013 versus FY through March 2012
FY Revenue 124.287856b versus 106.995529b +16.2%
FY Gross Profit 67.743420b versus 52.856310b +28.2%
FY Operating Expenses [40.643226b] versus [32.704953b] +24.3%
FY PBT 25.450565b versus 17.369400b +46.5%
FY PAT 17.539810b versus 12.627607b +38.9%
FY EPS 0.44 versus 0.32 +37.5%
FY Dividend 0.31 cents a share +40.9%
Cash and Cash Equivalents at End of Period

Company Commentary

Customer Numbers have increased +1.8% to 19.42m [1.4m Customers were disconnected in this Period]
Mobile Data Customers who were active in the last 30 days increased by 56.7% to 7.13m as at March 2013
MPesa Registered Customers grew by 14.8% to 17.11m as at end March 2013
Voice Revenue +12.6% to 77.66b
SMS Revenue +30.4% to 10.13b
Data Revenue increased by +27.8% to 8.42b
MPesa Revenue +29.5% to 21.84b
MPesa,SMS,Data Revenue increased to 32.5% of Total Revenues from 29.2%

Further Commentary
FY 2013 Voice Revenue now 65.8% versus 68.8% previously of Total Revenue
FY 2013 MPesa Revenue now 18.5% versus 16.8% previously of Total Revenue
FY 2013 SMS Revenue now 8.6% versus 7.8%
FY 2013 Data Revenue now 7.1% versus 6.6%
1.2m Customers using MShwari
Giving Free Cash Flow Guidance for FY 2014 of between 15.5 17.5b Kenya Shilling

Commentary

These Results have exceeded the Top End of Consensus Expectations. FY Revenue of 124.287856b +16.2%, FY PBT of 25.450565b +46.5%, FY PAT 17.539810b +38.9%, FY EPS 0.44 +37.5%
and a +40.9% Dividend Hike to 0.31 cents a share is a Tape that You cannot argue with. The Dividend Yield of 4.46% is high and handsome in particular in a World where Everyone is hunting for Yield. The Growth Curves look attractive and Note Well that Data grew +27.8% even after a very sharp Tarriff Discount.

I expect New All Time Highs in the share Price.

M-Pesa now contributes 18.5% of Total Revenue Safaricom FY 2013 says @BobCollymore Twitpic
http://www.twitpic.com/cqfdsp

H1 2013 versus H1 2012
Total Revenue 59.118b versus 46.09b +21.72%
Voice Revenue 37.422b versus 31.49b +18.84%
Messaging Revenue 4.269b versus 3.65b +16.96%
Mobile Data Revenue 2.972b versus 2.44b +21.8%
Fixed Data Revenue 1.011b versus 0.63b +60.48%
MPesa Revenue 10.427b versus 7.88b +32.32%
HandSet Revenue 2.428b -21.93%
Direct Costs 22.399b versus 21.97b +1.95%
Operating Costs 14.427b versus 12.898b +11.85%
EBITDA 22.292b versus 14.76b +51.03%
Net Income 7.775b versus 4.013b
EPS 0.19 versus 0.10

Strong financial results driving investment and shareholder returns
Profit before tax increased by 113% to Kshs 11.5bn
Profit after tax increased by 94% to Kshs 7.8bn
51% growth in EBITDA to Kshs 22.3bn with an EBITDA margin of 37.7%
Free cash flow improved 791% to Kshs 5.0bn
Good revenue recovery from damaging price wars
Total revenue grew by 19% to Kshs 59.1bn
Voice revenues grew by 19% to Kshs 37.4bn
NonVoice service revenues grew by 28% to Kshs 18.7bn
Continued growth in significance of Non-Voice service revenue (MPESA,SMS,Data)
Nonvoice service revenue now represents 32% of total revenues
Mobile and fixed data revenue increased by 30% to Kshs 4.0bn
MPESA revenue increased by 32% to Kshs 10.4bn MPESA has shown significant growth with an increase in registered customers to 15.2m; 9.7m of whom actively use MPESA at least once every 30 days. This growth in active customers, coupled with an increased number of transactions per active customer, led to a 32% increase in revenue to Kshs 10.4bn. MPESA now makes up 18% of total revenues.
Improved guidance for the full year
Forecasting low double digit growth in total revenue
Expect to maintain the current EBITDA margin
number of active mobile data customers increase by 30% to 5.59m and a 9% increase in fixed data customers to 6,718. This growth in customers coupled with increased data usage has resulted in a 30% growth in data revenues to Kshs 4.0bn.

Key Performance Indicators

Total customers (m) 19.211m +6.51%
MPESA registered customers (m) 15.23m +2.41%
Mobile Data - 30 day active customers (m) 5.586m +29.7%
Fixed data customers 6.718m +8.76%
Churn (%) 28.46 +0.57%
Service revenue ARPU 490.69 +11.8%
Voice ARPU 319.56 +11.07%
SMS ARPU 38.5 +8.91%
MPESA ARPU 115.22 +25.66%
Mobile Broadband ARPU 91.72 -16.75%
Data (SMS,broadband,MPESA) % total revenue 31.6 +7.34%
Number of M-PESA agents 45.540
2G base stations 2815
3G base stations 1545
Wimax Sites 190

Did he not do well? @BobCollymore Twitpic
http://twitpic.com/bbhvej

Conclusions

Strong 1st Half Results. I think we will see further Acceleration from here.


FY Results Analysis here
Total Revenue 107.00b versus 94.83b +12.83%
Direct Costs 43.47b versus 37.24b +16.74%
Operating Expenses 26.03b versus 21.87b +19.01%
EBITDA 37.5b versus 35.72b +4.96%
Operating Profit 20.15b versus 19.39b +3.93%
Net Financing and Forex Costs 2.78b versus 1.04b +168.44%
FY Profit Before Tax PBT 17.37b versus 18.36b -5.4%
FY Profit After Tax PAT 12.63b versus 13.16b -4.04%
Earnings Per Share 0.32 versus 0.33 -4.04%
Customers 19.07 versus 17.18 +11.01%
Registered MPesa Users 14.91m +6.45%
Number of fixed Data Connections 6.020m versus 4.483m +34.29%
Distinct Data Customers 4.553m versus 3.479m +30.86%
Revenue Analysis
Voice revenues 68.96b versus 63.5b +8.59%
Total Data Revenues 31.24b versus 24.7b +26.48%
SMS Revenue 7.77b versus 7.54b +2.96%
MPesa 16.87b versus 11.78b +43.19%
Data [Mobile and Fixed] 6.59b versus 5.37b +22.84%
Data Revenue as % of Total Revenue 29% versus 26%
Mobile Service Revenue ARPU 456.00 versus 436.6 +4.43%
Dividend +10% 22 Cents a Share

Conclusions

Strong H2. EPS H2 0.22 versus 0.10 H1 +120%
MPesa remains the Jewel and the Menu Reprice happened at the end of the Reporting Period.
The Dividend increase is a Muscular Move.
They Have beaten the Street estimates.


Swot Analysis H1 2012 versus H2011
Revenue 49.63b versus 47.11b +5.3%
Voice 68.3% of Total Revenues versus 74.8%
MPesa 17.1% of Total Revenues versus 11.9% +49.3%
SMS 7.9% of Total Revenues versus 8.2%
Mobile Data 6.7% of Total Revenues versus 5.1%
Total Data Revenue 31.7% versus 25.2%
OPEX +23%
SGA +26% Forex Loss 1.3b Kenya Shillings [Long Close Purchases have been hit by the FX]
H1 2012 EBITDA 14.76b -21.6%
Net Income 4.01b versus 7.63b
EPS 0.10 versus 0.19
Pretax profit fell to 5.4 billion shillings ($55.8 million) in the period from 10.4 billion a year earlier
Safaricoms average revenue per user (APRU) slipped to 438.9 shillings from 456.6 shillings a year earlier, although minutes of use jumped 57.7 percent to 123.
Chief Executive Bob Collymore told reporters the company expected its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin to finish in the low to mid 30s and for revenue to grow by high single digits over the full year.
Providing the assumptions we have made about the macroeconomic environment are right, then our guidance and EBITDA margins and revenue should stay the same, he said.
92 per cent of all Internet subscriptions in Kenya (are) on Safaricom connected devices.

Conclusions

This Period captured the most Brutal Period of Competition. Essentially the Competition was [and in most cases still is] selling Minutes at Below Cost. The Voice Revenue Curve bottomed out, however, at the end of this Period. I reminded Michael and Bob, that there had been a similar H1 Outcome and My Analysis shows that Safaricom exhibits quite Beta, in times of High Inflation and Drought. The Macro Picture has been very high beta as well over this Period. The Shilling was the worst performing currency in the World until quite recently. Inflation is just shy of 20.00% and was at about 3.1% a year ago. I asked and was informed that the Recent Price Increase has seen some slackening in Usage [thereby freeing up the network] but this has been more than compensated by the Price Increase. So I think we are past the worse in Voice. MPesa continues to exhibit hyper Growth. And the Mobile Internet continues to build. Its clearly been a very tough Reporting Period, however, I think we are through the bottom in the Earnings Trend.


FY 2011 Swot Analysis
12.9% Growth in Turnover to 94.83b
9.8% Growth in Ongoing Revenue 88.20b
Voice Revenue -1.7% 63.5b which is 66.9% of Total Revenue
SMS +45.3% 7.54b which is 5.7% of Total Revenue
M-Pesa +56% 11.78b is 12.4% of Total Revenue
Mobile and Fixed Data Revenue +80.3% 5.37b which is 8% of Total Revenue
Acquisition Revenue 6.64b

Revenue Growth +14.8% +19.1% +12.9%

Minutes of Use Per Subscriber increased from 60.6 to 96.0 minutes
13.8m MPesa Users +45.5%
Data Subscribers 4.9m +85.6%
Mobile Data SMS M-Pesa Revenue 26% of Total Revenue
Over 500,000 Data Enabled Hand Sets and Lap Tops sold in the Financial Year
Profit Before Tax PBT 18.36b versus 20.97b -12.4%
Blended ARPU 439 versus 457
Marketing Costs +37%
Gearing 19%
Dividend Held at 20c a share
Pay Out Ratio of 61%
EPS 0.333 a Share
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 23 May 2016
 
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