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VENTURES AFRICA – Kenya’s Vodafone subsidiary, Safaricom Tuesday posted a Sh11.2 billion ($131 million) H1 profit-after-tax, the largest net income ever recorded by any company in Kenya’s corporate history.
According to Kenya’s BusinessDaily, the unprecedented 6-month profit recorded by the telecom provider was occasioned by a 17.1 percent increase in sales to Sh69.2 billion, contributed by its non-voice business.
Though Safaricom’s core business still remains voice calls, the business’s share of the company’s overall revenue has steadily decreased as data consumption by telephone users continues to soar, making its non-voice business more profitable.
Reports reveal the voice business which accounted for 87 percent of Safaricom’s 2008 revenues, contributed 62 percent of the telecom operator’s total revenue in the year ended March 2003.
In the same financial year, its total non-voice revenues jumped 30 percent to Sh24.3 billion ($284.5 million), of which M-pesa, Safaricom’s mobile money service contributed half of the earnings.
Of the remainder, a 49 percent revenue jump to Sh6.4 billion came from short message service while mobile data also recorded a 43 percent jump to Sh4.3 billion ($50 million).
The growth witnessed in data consumption has also helped the Vodafone subsidiary record a boost in sale of data-enabled mobile phones.
“Analysts at Kestrel Capital said Safaricom has hinted that it will pay up to 85 percent of free cash flow in the current financial year which grew by 167 percent to Sh13.7 billion ($160 million) in the half year under review,” Business Daily reported.
It is speculated that the telecoms operator could up its dividend bonus to Sh0.40 per share based its 85 percent of free cash flow dividend payout policy.
Safaricom stock closed trading on the Nairobi bourse at Sh9.65, almost double of its initial public offer price of Sh5.