Econet posts stellar $600m HY revenue

The Chronicle

Business Editor
ECONET Wireless Zimbabwe Limited (EWZL) has announced a $600 million half-year revenue to August 31, 2018, up from $353 million in the same period last year, buoyed by a strong performance by its ‘SmarTech’ business unit.

The conglomerate, which is well on its way to becoming the country’s first listed billion-dollar revenue business, posted an impressive $122 million profit after tax in the same period, a 265 percent jump from the $49 million reported in the same period last year.

The blue-chip company’s 70 percent increase in overall venue was boosted by its $248 million SmarTech revenue growth, which jumped by 145 percent from $101 million in the same period last year.

Mobile network operating (MNO) revenue from data, voice and SMS grew by 40 percent to $353 million, up from $252 million in results that management credited to its TMT (telecom, media and technology) model, and that it ascribed to EWZL’s ability to sweat all its assets — both MNO and SmarTech.

The results, announced at an analyst briefing in Harare on Thursday, showed the company achieved a half-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $252 million, 82 percent more than the $139 million reported in August 2017, and a reduced capital expenditure of $20 million, nearly a third of what it spent in the same period last year.

The Zimbabwe Stock Exchange (ZSE) listed concern reported a 181 percent surge in earnings per share (EPS) of 6.0 cents, from 2.1 cents in August 2017.

The half-year results come at a time EWZL has published a circular to shareholders announcing plans to separately list its SmarTech assets on the ZSE.

In the chairman’s statement, released with the results, the company said the de-merged entities will operate separately but remain interdependent while pursuing the group’s proven TMT multi-sectoral model. Chief executive officer Mr Douglas Mboweni said Econet had built a solid business case based on a unique model to create future-proof and stakeholder value.

“Through relentless innovation and the ability to leverage technology to meet consumer needs, the company has successfully created a digital ecosystem through which its MNO and SmarTech assets create customer value in diverse industries and market segments, which include mobile financial services, insurance, transport and logistics, education, heath, and many others,” Mr Mboweni said, adding that the Cassava SmarTech spin off would unlock significant shareholder value, because, “the sum of the parts are always greater than the whole”.

Cassava chief executive Mr Eddie Chibi said the results demonstrated the evident potential and growth prospects that lie within the technology-driven smartech brands, saying Cassava would work to empower people and use innovation to take stakeholder value-creation to a whole new level.

EWZL finance director Mr Roy Chimanikire, attributed the company’s solid triple digit growth to the strategic decisions it made to diversify, grow and invest in new revenue streams while successfully managing to grow traditional revenue streams such as voice and SMS through a strong customer focus.

In its 20 years of existence Econet had made significant contribution to the economy.

The company has paid over $1.7 billion in statutory payments to the Government since 2009, Mr Chimanikire said, before announcing a $30-million dividend to shareholders.