Safaricom has seen profit after taxation for the half year ended September 30th 2011 drop by 47.4% to KSh 4.013 billion from KSh 7.631 billion in the same period last year. This was despite a 50.8 per cent drop in taxation over the same period that saw the mobile operator pay KSh1.384 billion in taxes compared to 2.813 billion last year. Profit before tax for this half year stood at KSh5.397 billion compared to KSh10.444 billion last year.

The results were announced Wednesday afternoon at Safaricom Centre by Chief Executive Officer, Bob Collymore and outgoing Chief Financial Officer, Chris Tiffin. Collymore attributed the performance to a more than 50% decline in calling rates, high inflation that cut down on spending, high forex rates on the shilling and increased fuel costs.

Forex depreciaton of the shilling accounted to a KSh1.4 billion charge in Safaricom's books bringing EBITDA (Earnings before interest, taxes, depreciation, and amortization) down 21.6 per cent to KSh 14.760 billion from KSh 18.831 billion last year. EBITDA is used to standardise and compare earnings between several organisations.

Total revenues increase by 5.3 per cent from KSh 47.11 billion to KSh 49.63 billion driven by data growth.

This is the first half in which the impact of call charges decrease from KSh 8 per minute to KSh 3 per minute is being seen. The charges were dropped in August 2010 in a promotion that later saw tariff drops on 30th September 2010. This was during the entry of Bharti Airtel into the market through the purchase of Zain operations that saw them cut calling charges by more than 60 per cent.

Voice revenues fell 5.5 per cent to KSh31.487 from KSh33.305 billion with the effect being cancelled out by a 30.4 per cent growth in data revenues from KSh 11.202 billion to KSh14.610 . Data growth included a 49.3 per cent growth in M-PESA mobile money transfers revenue from KSh billion 5.277 to KSh 7.881 billion , a 36.3 per cent growth in total data revenues from KSh 2.256 billion to Kes 3.075 billion. SMS however, also counted as part of data revenues, decreased 0.4 per cent from KSh 3.669 billion to KSh 3.654 billion.

With 18.1 million customers presenting an 8 per cent increase from 16.7 million customers in the previous half, Average Revenue Per User (ARPU) dropped 3.9% from KSh 438.9 to KSh 456.6. Minutes of use however rose 57.7% from 78 minutes per user to 123 minutes per user.

Mobile data users had increased 71 per cent to 5.1 million from 3.0 million in the previous half, accounting for over 92 per cent of Internet users in the country according to Communication Commission of Kenya reports.

Customer churn decreased to 28.3 per cent from 31.2 per cent. With the introduction of mobile number portability in April this year, Collymore said that effect had not been huge with Safaricom losing only 18,000 subscribers .

Collymore however anticipates better times ahead for the operator with the recent KSh. 1 increase in calling rates to KSh. 4 within the network and KSh 5 to other network. "The increase in prices one month ago has seen a fall in minutes, though results are positive so far as revenue realised overgrew ," said Collymore. He said that he could not account for the decisions of competitors who announced that they would not be increasing their charges.

Collymore also announced that Safaricom would be building its own fiber network in order to increase reliability due to increased incidences of fiber cuts. Safaricom has in the past preferred to hire rather than build its own fiber network.

Press release on the results is available here while the presentation on the same is available here.