Econet has released its results for the half year ended August, 31, 2017 showing significant growth in both revenue and profits. Revenue for the period was up by 17 percent to $353 million while profit was up 228 percent to $49 million from $14,9 million prior year comparative.
The company's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose by 31 percent to $139 million from $106 million recorded in the same period last year.
The results also reflects the reduction in the group's finance costs following its $130 million capital raise which was used to pay off its foreign debts. Econet managed to reduce its finance costs during the reported period by $ 10,7 million after repaying its US dollar debt with the funds raised from its Rights Offer, which was concluded earlier in the year. In the first half of 2016, the company paid $15,2 million in finance costs. Chief Executive Officer, Douglas Mboweni attributed the strong performance to continued innovation within the business with non-voice products increasing their contribution.
"Our focus is to use technology to transform, in a deep, meaningful and fundamental way, how our customers transact and do business, and to provide convenience through technology," said Mr Mboweni.
"In line with our TMT strategy, we recently launched Kwesé TV in Zimbabwe, in partnership with Econet Media Limited. We are encouraged by the employment opportunities and new skills that have been created in our country as a result," Mr Mboweni said. Data, Ecocash and other non-voice products now constitute 63 percent of the company's total revenues. Consistent with the rapid growth in data usage and increased smartphone penetration, data revenue grew by 9 percent, from $52,8 million to $63,4 million during the period under review. Mobile financial transacting service EcoCash's revenues rose by 45 percent, from $39,2 million to $57,1 million. Commenting on the results, Econet Wireless Zimbabwe's Finance Director Roy Chimanikire said the company continued to grow shareholder value in a difficult operating environment.
"Our results demonstrate diligent execution of our strategy. Our key message has been that we are growing the non-voice elements of our business. The trends that we are seeing are very encouraging. As we continue to evolve into a fully converged TMT business, we see our business changing in the depth and quality of its revenue streams and its return potential. We are well positioned to take advantage of the opportunities that are available to us in this market," said Mr Chimanikire.
"Our Rights Offer, which raised $130 million to settle all our United States Dollar debt, enabled us to avert a potentially disastrous situation for the business, had we defaulted on our debt obligations," he said. Commenting on the business outlook, Mr Mboweni said the future looked bright.
"Going into the future, we will continue to strive to deliver more value to our customers through tailor made product offers, as well as market segmentation and product bundling across all the three pillars of our TMT model. In view of the current cash shortages, and the growing use of digital financial transactions, our solutions are now a preferred mode of transacting, and we are working on further scaling up our mobile transacting and banking systems to accommodate increased demand," said Mr Mboweni.
- The Herald Zimbabwe