Super-Profitable Safaricom

Safaricom had another record year in 2004. Turnover (sales) increased from 19 billion to 27 billion, resulting in after-tax profits of 5.9 billion up from 3.5 billion in 2003.

Long-term debt reduced from 9.5 to 6.8 billion and on news reports, MD Michael Joseph was quoted as saying that Safaricom’s debt agreements don’t allow it to pay any dividends until the debt is fully paid.

However, in the directors’ comments, you can almost hear the company crying out to the government “how much blood (tax) do you need from us?” Safaricom paid almost 10 billion (9.69 billion in duties, taxes and licence fees) last year and over 30 billion since the company was launched with taxes accounting for 26% of airtime cost for phone users.

4 thoughts on “Super-Profitable Safaricom

  1. Anonymous

    That is why we need the 11% that vodafone wants to buy sold to kenyans instead. We buy the airtime – I think we should get a shot at buying the shares.

  2. daktari

    i think that the best thing would be for the government to hold on to that 11%.I fear that in the long run loss of control will convert safaricom into another ‘cash for export
    company like EABL,or KA.As happy as you people are with bumper dividends the ones carting off the cash are the 10%and above stakeholders.Ceding control for 100$million will translate to them recouping the money at about 1 billion a year!!yes..over 100 million dollars which makes it the easiest investment for them once they force though the change in the company statutes to allow dividends.We should not sell it cheaply..500 million maybe

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