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NetOne Reports $9 Billion Profit Before Tax

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State owned Mobile Network Operator NetOne has declared ZWL $9 billion profit  before taxation and  interest, as the board  held their annual general meeting recently.

The report also states that the mobile network recorded revenue growth  up to $18billion ZWL,  a 96% growth from the  previous year, while  inflation factor could have  also  been a major player o the  reflection.

Whilst month-on-month inflation was stable throughout the year maintaining single digit values, annual inflation fell from a high of 349% in December 2020 to 61% by December 2021. GDP grew by 7.4% in 2021 after contracting by 6.2% in 2020.

NetOne stated that their  digital transformation strategy led to data contributing 51% of the total revenue.

Addressing the  board during the  AGM, the  acting board  chairman Susa Mutangadura said that  the business benefited from its designation as an essential service during the Covid-19 pandemic lockdowns, as well as increased demands for its products. During the period under review, the business witnessed growth in both revenue and subscribers.

Revenue for the year grew by 96% to ZWL18.6 billion from ZWL 9.5 billion in the prior year. Overheads grew by 46% with the major cost drivers being network, staff and marketing costs. Earnings Before Interest and Tax (EBITDA) was ZWL9 billion up from ZWL3.2 billion in prior year.

A healthy EBITDA margin of 48% was recorded. The Company continued to be weighed down by the huge exchange losses on the foreign loans leading the Company to a loss making position.

Capital expenditure was ZWL1 billion, mainly driven by the NMBB Phase III network expansion project.

The board chairman however bemoaned lack of foreign  currency as a major  hampering factor  towards their growth

The Company continued to face challenges in accessing foreign currency, given that the greater part of operating costs for a mobile telecommunications company are paid in USD, with vendors for equipment and systems used to run the network demanding payment in foreign currency.

Issues  of  Power generation were also mentioned  as top operational expenses  dwindling their revenues.

Active subscribers closed off the year at 4,470,592 showing a net growth of 779,278 subscribers in a single year from the 2020 closing base of 3,691,314 subscribers. As a result, NetOne subscriber market share grew significantly from 28.0% in 2020 to 31.4% in 2021.

 

The situation was exacerbated by the power challenges experienced during the period under review which compelled the business to consider alternative sources of power. Reliance was placed on diesel generators with fuel being procured largely in USD to power base stations

@admin_techno

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