Econet posts $119m profit

HARARE - Econet Wireless (Econet), Zimbabwe’s largest mobile network operator, recorded a $119 million profit after tax in the year to February 2014.

The earnings were 14 percent down from $140 million realised in prior year as voice income remained flat.

The telecommunications group, which grew connected subscribers by 780 000 to 8,8 million during the period under review, managed to increase revenue by eight percent to $752,7 million from $695,8 million, largely driven by growth in data and overlay services.

Its chief executive, Douglas Mboweni, said voice revenue growth had stagnated as the service had matured.

He said with mobile penetration now in excess of 103 percent, new customers coming onto the network were no longer able to contribute significantly to growth in revenue.

“Everyone in the country who wants service now has it. So, although we added… new subscribers over the last 12 months, they did not help to increase revenue,” Mboweni said.

Econet currently holds the largest market share of the mobile industry in Zimbabwe — with a population of nearly 14 million — at approximately 70 percent.

It is followed by Telecel Zimbabwe with around 2,5 million subscribers and State-owned NetOne.

Mboweni noted that broadband and new services such as EcoCash, a mobile money transfer platform, were rapidly growing and offsetting the slowdown in SMS.

“Due to the constant and rapid change in the telecommunications industry, a high performance innovation-led culture is critical to ensure the creation of new commercial opportunities,” he said, adding that “the current business model (now) focuses on growth from new revenue streams mainly through data and overlay services”.

During the year under review, broadband revenue grew 62 percent to $72,4 million while EcoCash’s went up 307 percent to $33,4 million, contributing more than 14 percent to the overall revenue for the period.

Earnings before interest, taxation and depreciation stood at $332,2 million compared to $302,4 million registered in preceding period.

Depreciation and amortisation increased 42 percent to $ 101,7 million while total assets value increased by 16 percent to settle at $ 1,2 billion.

Debt to equity ratio improved to 38 percent from 54 percent for the previous year.

Meanwhile, the group fully paid for a 20-year operating licence at a cost of $ 137,5 million.

It also declared a dividend of 1,29 cents per share for the first time in more than three years.


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