NO SAFARI FOR SAFARICOM LTD

In the financial year to March 2017, there was clearly no smooth sailing safari trip for Kenya's telecommunication model, Safaricom ltd. It has always been and was a matter of cash.

So much cash flows in and so much flows out just as fast that a relax cruise is always out of the question.

For example, in the year under review, according to audited figures signed by board chairman Nicolas Nganga and released earlier this month, total income of the company grew by 20.3% to 217,097.2m Ksh yet Safaricom still ended with doubled working capital deficit.

The deficit rose to 29bn Ksh from 14.bn despite so much cash generated from operations, 16.5bn Ksh in borrowed funds, and 13.5% drop in receivables.

The main reason was that with customers number increasing by 11.8% to 28.13m, says the chair, Safari com had to invest some 37.7bn Ksh within the period on its 2G; 3G and 4G networks and roll out more fibre cables mainly bringing total investment in network upgrade since inception to 344.08bn Ksh.

At the same, within the year it also grew inventories by 67.9% to 1370.7m Ksh and reduce payables by 8.79% to 36.5bn from 40bn Ksh.

No wonder, still watching out for even Kenyan cents, the proposed dividend for the year will not be paid until December this year.

Otherwise, safari trip or not, Safari com had a good year as its profit margin rose to 32.5% from 31.5% despite only single digit (7.13%) increase in core revenue to 212.8bn Ksh and 25.2% drop in finance income to 1722.3bn Ksh; dry up of fair value surplus and 6.1% rise in finance cost to 1484.9m Ksh.

The boosters included 983.2% leap in other income to 2510.9bn; single digit growths in direct costs (7.12% to 66.7bn); and other expenses (8.97% rise to 44.96bn Ksh).

In the end, from 20.3% rise in total income powered by other income growth and above 30% increases in Mobile data, fixed service and Mpesa income, Safaricom realised 24.4% increase in profit before tax to 70.6bn from 56.76bn Ksh previously.

Not bad but, pray, when will liquidity stop being Safaricom's main headache in spite of all the billions it generates as income annually?

SAFARI COM LTD: Ksh bn.
                        2017.    20

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more