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Safaricom HY2013 Profit before tax up 113%
Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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Pesa Nane wrote:2012 wrote:This is good for scom but to be honest I can't see this lasting into the future unless they come up with other revolutionary products like Mpesa. Right now they are the most expensive network, all the other operators and independent companies have their own 'mpesa', they are losing technical personel. I just can't see this very bright future yet but it's probably just me. Seconded!! Iam also celebrating  but a model based singularly on over-pricing to make profit is not sustainable. Being pioneers, with widest coverage, biggest market share etc they should be beating competing to submission on pricing and still manage profits. Innovation, innovation, innovation!! I would like to see who the competitors will be in 2015. Clearly, Yu is on the verge of exiting the Market (they have the CRAPPIEST service). Airtel minute factory has failed badly in Kenya. Orange is on the way to been much more expensive than SAFCOM. Here is a list of average calling rates around Africa in Kenyan Shillings; i. Angola - KES48 ii. Zambia - KES28 iii. Uganda - KES18 iv. Tanzania - KES5 Airtel is using its profits in other countries (like Malawi and Nigeria) to sell airtime below cost in Kenya just to push out the smaller operators until its just them and Safaricom. It would then raise rates to profitable levels and slowly push for more market share from Safarcom. And this is failing in KENYA. Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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dunkang wrote:Pesa Nane wrote:2012 wrote:This is good for scom but to be honest I can't see this lasting into the future unless they come up with other revolutionary products like Mpesa. Right now they are the most expensive network, all the other operators and independent companies have their own 'mpesa', they are losing technical personel. I just can't see this very bright future yet but it's probably just me. Seconded!! Iam also celebrating but a model based singularly on over-pricing to make profit is not sustainable. Being pioneers, with widest coverage, biggest market share etc they should be beating competing to submission on pricing and still manage profits. Innovation, innovation, innovation!! I would like to see who the competitors will be in 2015. Clearly, Yu is on the verge of exiting the Market (they have the CRAPPIEST service). Airtel minute factory has failed badly in Kenya. Orange is on the way to been much more expensive than SAFCOM. Here is a list of average calling rates around Africa in Kenyan Shillings; i. Angola - KES48 ii. Zambia - KES28 iii. Uganda - KES18 iv. Tanzania - KES5 Airtel is using its profits in other countries (like Malawi and Nigeria) to sell airtime below cost in Kenya just to push out the smaller operators until its just them and Safaricom. It would then raise rates to profitable levels and slowly push for more market share from Safarcom. And this is failing in KENYA. Why is it so cheap in TZ?When is the top provider there? And if Airtel is using your alleged strategy then that's a unique style which may work for them in medium to long tern (2015 and beyond!) Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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The reason why Airtel will never make it in Kenya is because they have never succeeded to associate themselves with Kenyaness...thats where safcom has won. Safcom subscribers are so loyal. The telcom industry is changing fast, voice will no longer be the money maker so those focusing on the low end customer to keep calling so that they make money are going sink very deep. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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At day's finish 4.95/- trades which is 11.24% for the day. VWAP will close at 4.80/- (7.87% up). I can't recall anytime since IPO listing when this stock rallied by double digit % gain...! I'm soooooo tempted to sell some. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 6/23/2009 Posts: 13,555 Location: nairobi
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hisah wrote:At day's finish 4.95/- trades which is 11.24% for the day. VWAP will close at 4.80/- (7.87% up).
I can't recall anytime since IPO listing when this stock rallied by double digit % gain...! I'm soooooo tempted to sell some. Problem with Safaricom is not the company. It is the share. It was overpriced upon IPO. KES 5 is too expensive. I will definitely sell on KES 5.50 or higher.
HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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H1 EPS, 0.19 + H2 EPS, 0.25 = FY EPS 0.44 #Record performance
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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My bet is that safcom will be flat or in loss territory next financial year,it now looks rossy because we are comparing with last years worst ever perfomance...above 5.50 is a sell to me. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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mlennyma wrote:My bet is that safcom will be flat or in loss territory next financial year,it now looks rossy because we are comparing with last years worst ever perfomance...above 5.50 is a sell to me. For the FY2013 (i.e. April 2012- March 2013), the HY2013 presentation clearly indicated that its expected "lower double digit growth" . From what i understand from that statement is that they expect anything between 10-30% growth, compared to FY2012. Or what does Lower Double Digit mean? Help me Wazuans. Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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surely anyone who bought at 3.00. the higher it goes the more likely your (already large)paper profit increase is coming to an end. who last year could have dared to think safcom would touch 5.00 between then and 2013? now even 5.50 is in sight. unbelievable. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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obiero wrote:hisah wrote:At day's finish 4.95/- trades which is 11.24% for the day. VWAP will close at 4.80/- (7.87% up).
I can't recall anytime since IPO listing when this stock rallied by double digit % gain...! I'm soooooo tempted to sell some. Problem with Safaricom is not the company. It is the share. It was overpriced upon IPO. KES 5 is too expensive. I will definitely sell on KES 5.50 or higher. I have never come across a cheap IPO. The price is always at a premium. The IPO game setters need to be paid you know...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Aguytrying wrote:surely anyone who bought at 3.00. the higher it goes the more likely your (already large)paper profit increase is coming to an end.
who last year could have dared to think safcom would touch 5.00 between then and 2013? now even 5.50 is in sight. unbelievable. Have you seen BAT, Uchumi, EABL, KCB, ARM rallies? That is what hot money does! Compared to 2007 market climax, NSE is still very far from that level. Then P/Es of 20s - 40s were the norm! I remember Equity had a P/E of 44 at one point!
Another thing is Wanjikus are still watching. If next year they see stocks flipping similar gains, then the match back into equties will start. Most likely late 2013. By 2014 many new wazua members will be giving success stories as the bull floats everything up. Then ridiculous P/Es will pop up again. Then you'll know what to do 
@dunkang - they expect better performance than 2011-2012. Bob said the mgmt raised the outlook for this year (me thinks mgmt must be on an offense surprise - I wonder what is that hat trick). Last year they downgraded after taking a 47% hit on H1 2011 numbers. Lower double digit is 10-20%. Still a big feat coming from a 4% dip with a nasty price war, MNP bogus campaign and a hostile CCK...
I expect mpesa bank to range at 4.50 - 5.20 till March 2013.
NSE20 will likely close above 4200 - 200pts above by estimate. 4400 is tough resistance, but next year if elections are fine, we can see 4800 - 5000 zone.
Regret not boarding simba at 20. Did so at 25. Expect it to print 40 with a fat dividend in 2013. $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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hisah wrote:Aguytrying wrote:surely anyone who bought at 3.00. the higher it goes the more likely your (already large)paper profit increase is coming to an end.
who last year could have dared to think safcom would touch 5.00 between then and 2013? now even 5.50 is in sight. unbelievable. Have you seen BAT, Uchumi, EABL, KCB, ARM rallies? That is what hot money does! Compared to 2007 market climax, NSE is still very far from that level. Then P/Es of 20s - 40s were the norm! I remember Equity had a P/E of 44 at one point!
Another thing is Wanjikus are still watching. If next year they see stocks flipping similar gains, then the match back into equties will start. Most likely late 2013. By 2014 many new wazua members will be giving success stories as the bull floats everything up. Then ridiculous P/Es will pop up again. Then you'll know what to do
@dunkang - they expect better performance than 2011-2012. Bob said the mgmt raised the outlook for this year (me thinks mgmt must be on an offense surprise - I wonder what is that hat trick). Last year they downgraded after taking a 47% hit on H1 2011 numbers. Lower double digit is 10-20%. Still a big feat coming from a 4% dip with a nasty price war, MNP bogus campaign and a hostile CCK...
I expect mpesa bank to range at 4.50 - 5.20 till March 2013.
NSE20 will likely close above 4200 - 200pts above by estimate. 4400 is tough resistance, but next year if elections are fine, we can see 4800 - 5000 zone.
Regret not boarding simba at 20. Did so at 25. Expect it to print 40 with a fat dividend in 2013. yep! sell. Imagine there was a time HFCK was at around pe of 35(if im not wrong) during that bull period and no dividend was been paid! The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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the deal wrote:This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20. @thedeal their dividend payout says the company is far from mature. CAPEX also high, aiming at data offering improvement and mpesa. I am counting on Safaricom to come up with new evolutionary products since they cannot expand out of Kenya. @hisah the growth will come from cost reduction. The company has indicated cost savings of 2B+ from a renegotiation of the commission agreement for buying equipment through vodafone. Life is short. Live passionately.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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sparkly wrote:the deal wrote:This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20. @thedeal their dividend payout says the company is far from mature. CAPEX also high, aiming at data offering improvement and mpesa. I am counting on Safaricom to come up with new evolutionary products since they cannot expand out of Kenya. @hisah the growth will come from cost reduction. The company has indicated cost savings of 2B+ from a renegotiation of the commission agreement for buying equipment through vodafone. Oops! I didn't know that! So, How Come?? Pesa Nane plans to be shilingi when he grows up.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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sparkly wrote:the deal wrote:This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20. @thedeal their dividend payout says the company is far from mature. CAPEX also high, aiming at data offering improvement and mpesa. I am counting on Safaricom to come up with new evolutionary products since they cannot expand out of Kenya. @hisah the growth will come from cost reduction. The company has indicated cost savings of 2B+ from a renegotiation of the commission agreement for buying equipment through vodafone. That capex hike is what I'm looking at. Is it for 4G rollout? Or what product is up the sleeves since a lot of cashflow is now piled up..$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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hisah wrote:sparkly wrote:the deal wrote:This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20. @thedeal their dividend payout says the company is far from mature. CAPEX also high, aiming at data offering improvement and mpesa. @hisah the growth will come from cost reduction. That capex hike is what I'm looking at. Is it for 4G rollout? Or what product is up the sleeves since a lot of cashflow is now piled up.. They are going to increase fibre from 600km to 2400 in the next 3yrs at a cost of KShs 14B. I don't understand why they can't just acquire jamii telkom 4000km of fibre instead of re-digging trenches. With fast changes in Telecoms, this is money that may never be recouped in time. Life is short. Live passionately.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Come on People, Safcom has no competition, the nearest compe it has is EABL "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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sparkly wrote:hisah wrote:sparkly wrote:the deal wrote:This is a mature company with limited growth prospects going forward, I can't buy it at a PE beyond 10, which means my fair price is KES4.20. @thedeal their dividend payout says the company is far from mature. CAPEX also high, aiming at data offering improvement and mpesa. @hisah the growth will come from cost reduction. That capex hike is what I'm looking at. Is it for 4G rollout? Or what product is up the sleeves since a lot of cashflow is now piled up.. They are going to increase fibre from 600km to 2400 in the next 3yrs at a cost of KShs 14B. I don't understand why they can't just acquire jamii telkom 4000km of fibre instead of re-digging trenches. With fast changes in Telecoms, this is money that may never be recouped in time. Didn't Safcom have a tiff with JTL? Nowadays, JTL is going after the high-end retail market with the Faiba ads. KDN has many issues but if it's cheap enough it can be a takeover target. Access looks interesting. I was told (rumour) that the Somens had rejected an offer at 20/- & now the shares are trading at 4.60 so there is a (slight) possibility of a takeover. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 8/4/2012 Posts: 155 Location: Kenya
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murchr wrote:Come on People, Safcom has no competition, the nearest compe it has is EABL If you don't want to go to plan B have a good plan A.
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