Econet’s FY revenue slides, again

– Listed mobile telecoms giant Econet Wireless Zimbabwe has reported a decline in revenue to $621, 7 million for the year ended Feb 28, 2017 from $640, 9 million previously, a 3 percent decline.

The dip in revenue was largely due to underperformance of the group’s flagship business – the cellular network operation. That segment saw revenue slide 6, 6 percent to $495 million from $530 million in the prior comparable period.

But revenue from the group’s financial services and the beverages business rose to $126 million from $110 million. Meanwhile, Econet’s data and mobile financial services businesses now contribute about 32 percent of revenues up from 14 percent in the first half of the year just ended.

EBITDA declined 6 percent to $223, 9 million from $238, 4 million. And profit for the period was 10 percent lower at $36, 2 million compared to $40, 2 million prior year comparative.

Operating profits were 15 percent down to $85, 8 million from $101, 8 million, while finance income also dipped in a huge way to $673 000 down from $2, 8 million prior year.

Finance costs however countered this with a 26 percent dip to $26, 7 million from $36, 2 million. In a statement accompanying the results, chairman Dr Jim Myers said the group’s capacity to invest and therefore deliver efficient service was hamstrung by constrained access to foreign currency.

“Generally capex (capital expenditure) to revenue ratios in our industry are above 10 percent and the inability to continue investing at the appropriate level may delay our ability to optimally deliver our services, consistently and reliably, unless we are able to obtain access to foreign currency which is required to continuously capitalise the business,” he said.

The group’s capex to revenue ration currently stands at 5 percent. Added Econet finance director Mr Roy Chimanikire:

“Our need to address the imminent default on our loans due the limited availability of foreign currency saw us launching the largest capital raising exercise in the history of Zimbabwe Stock Exchange (ZSE). We are thankful to the support from our shareholders and all stakeholders which resulted in the Company raising sufficient capital to retire its foreign long-term bank debt.

“We are now in a stronger position to deal with the challenges of operating in an increasingly more difficult economic environment.”

The group’s basic earnings per share are improved at 2,7 cents per share up from 2,6 cents per share. The board has declared a dividend totaling $12, 1 million.

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