Econet Wireless Zimbabwe’s after tax profit for the year ended February 28,2017 slumped by 10 percent to $36, 188 million from last year;s figure of $40, 2 million on the back of low customer spending.
“Profit after tax was US$36.2m, down from US$40.2 million last year, impacted by a general decline in consumer spending,” said Econet in a statement.
In a statement accompanying the results, the company’s chairperson Dr James Myers said their revenue marginally dropped by 3 percent.
Despite the dwindling voice revenues in the telecommunication industry across the globe, several companies to stay afloat are introducing other services. Compared to the previous period of 14 percent, Econet’s data and mobile money businesses now chip in 34 percent of their revenues.
“Our data and mobile financial services businesses now contribute about 32percent of our revenues, from about 14percent in the first half of our financial year ending 28 February 2015. This demonstrates how we have been creative to recalibrate the business, cognisant of the challenges faced globally by operators in sustaining a growth in voice revenues,” said Dr Myers.
Econet Wireless CEO, Mr. Douglas Mboweni commenting on the results said, “Our business is now a fully-fledged Telecom, Media and Technology (TMT) player offering a wide range of bundled services which change the way our customers engage with each other. We remain strong in our traditional ‘bread and butter’ telecom business, but we are seeing a significant contribution coming from new business areas.”
Commenting on the financials Finance Director, Mr. Roy Chimanikire said it is not always the Government’s duty nor the Reserve Bank of Zimbabwe of proffering ways to counter the foreign currency challenges.
“Against the background of limited foreign currency, we continued exploring innovative ways to address this challenge. We believe that it is not the Government or the Reserve Bank of Zimbabwe alone that need to come up with solutions to the current challenges we face. 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,” said Mr. Chimanikire.
Dr Myers also noted they are owed over $26 million by their interconnect partners in Zimbabwe.
“Payments due to us from our local interconnect partners remain a challenge with over US$26 million owed to us as at 28 February 2017. The inability to obtain the payments also affects our investment decisions as this cash flow is necessary in order to meet the costs of providing the interconnect services on the network. We continue to consider options to address this outstanding issue,” he said.