• The active subscriber numbers have increased to 13.36m from 10.23m, an increase of 30.6%.
• Subscriber market share at 79%
• Revenue market share estimated at 83%
• Turnover increased to Kshs70.48 bn compared to Kshs61.37 bn in the previous year, a growth of 14.8%.
• Blended Average Revenue Per User (ARPU) for PrePay and PostPay was KES475. ARPU reduced in the year as a result of increased penetration and lower average tariffs. This was however compensated by increased average minutes of use per month of 57.5 from 52.8 in the previous year.
• Strong EBITDA of KES27.95bn, including a forex loss of KES679m compared to KES118m in the previous year.
• Operating profit of KES16.18bn impacted by increased depreciation in line with the increased capital investment
• Profit before tax of KES15.30bn impacted by increased depreciation and higher financing costs. The prior year financing costs included two non trading gains to the value of KES1.76bn.
• Increasingly strong growth in the M-PESA service with 6.18m registered users compared to 2.08m users in the previous year.
• Capital expenditure investment in the year ended 31 March 2009 was KES23.82bn, increasing the total capital investment since inception to Kshs119.79bn.
• Increased 2G sites across the country to 1,899 sites from 1,558 sites.
• Increased data business for corporate, medium sized institutions as well as individual customers. 301 sites have been upgraded to 3G to support this strategy. The number of distinct data users has increased from 0.57m at the beginning of the year to 1.47m reflecting the growth potential in the data market.
• Cash from operations of Kshs30.10bn, remained strong during the year enabling the company to expand the network coverage further and ensure that the core network was enhanced to manage the increased subscriber base.
• Total gross borrowings (excl. cash and cash equivalents) increased to Kshs11.31bn from Kshs9.20bn. Gearing (gross borrowing less cash and cash equivalents) was 12.0% from 8.0% due to a marginal increase in borrowings.

Outlook

External market expectations expect that market penetration could increase to 65% over the next four years. This reflects a significant opportunity for future growth where we expect to remain market leaders and maintain our leading position.

With the increased levels of penetration into more rural areas where consumer disposable income is lower, it is anticipated that voice ARPU’s will continue to decline. However with internet penetration at less than 10%, there is a significant opportunity to compensate for the declining voice ARPU through increased data ARPU’s.

Safaricom is well positioned to take advantage of this opportunity with the continued expansion of our existing 3G and Wimax infrastructure technologies, products and offerings which will be greatly enhanced with the landing of the submarine fibre optic cables, TEAMS (in which we have a 20% shareholding) and Seacom.

Our capital expenditure is expected to remain high over the next few years as we continue the rollout of our data infrastructure and continue to invest in the capacity, coverage and quality of our network. These investments will enable Safaricom to exploit the high growth potential of the data market, as well as protect its market leader position.

The company will pursue and investigate further potential acquisitions to enhance the overall data services and is well positioned to continue to increase shareholder value now and in the future.

A full version of the financial results is available here: http://www.safaricom.co.ke/fileadmin/resources/downloads Summary_comments_on_trading_2009__2_.pdf

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