Econet Revenue 3pc Down
The deteriorating economic environment in Zimbabwe continues to weigh down the performance of mobile network operators with Econet Wireless recording a 3 percent decline in revenue for the year ended 28 February 2017.
The giant telecommunications company reported that the Group’s revenue for the period under review declined by 3% to $621.7 million with Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) going down by 6 percent to $224.0 million from $238.4 million.
Group chairperson, James Myers was however upbeat that even under these challenging conditions, their earnings remain competitive supported by creativity of the company to recalibrate the business at a time operators globally are struggling to sustain growth in voice revenue.
“Even under these challenging conditions, at 36.0%, the EBITDA margin remains competitive; we have been creative to recalibrate the business, cognisant of the challenges faced globally by operators in sustaining a growth in voice revenues.
“In an environment with limited foreign currency we have continued to explore ways in which to address these challenges one of these being the recently concluded Rights Offer,” said Myers.
He added the company is owed in excess of $26 million from its local interconnect partners with their inability to obtain the payments affecting investment decisions.
Econet Wireless Zimbabwe Chief Executive Officer, Douglas Mboweni noted that the business profitability was negatively affected by deterioration in economic environment, resulting in a decline in profit after tax from $40 million to $36 million.
Mboweni added that despite the challenging economic environment, Econet is resilient in its quest to grow its broadband, EcoCash and Steward Bank operations.
During the reporting period, Econet recorded growth in revenue from its EcoCash operations from $73 million in 2015 to $77 million in 2016 with the company increasing its subscribers from 5.8 million to 6.7 million.
According to Mboweni, Steward Bank’s performance was noteworthy with profit after tax going up from $5.4 million in 2015 to $6.2 million in 2016, backed by a solid non-traditional banking business model.
Meanwhile the company declared a dividend of 0.467 cents per share amounting to $12.1 million for the year ended 28 February 2017.