Econet shareholders to share stunning US$23m in dividends

ZIMBABWE's biggest mobile phone company Econet Wireless Zimbabwe — fresh from a record US$113 million after-tax profit for the full year to February 2010 —will pay out a whopping US$23 million in dividends to its shareholders this year.

The mobile phone operator, with over four million subscribers, declared a US$0,06 dividend to take the full year cumulative dividend to US$0,14 after the company declared US$0,08 in the interim.

Econet Wireless had 163 786 300 shares in issue as at February 28 this year, which would translate to US$23 million assuming there is no change in the number of issued shares by May 30 this year.

The mobile phone operator said the US$0,14 dividend, only payable to shareholders registered in the books of the company up to the end of May, would be paid out in cash on or about June 30, 2010.

The US$0,14 dividend brings to 14 payouts the mobile firm, with more than 65 percent of the market share, has declared to its shareholders while the cumulative dividend to date stands at 65,142 USc.

The latest dividend declaration came on the back of a sterling performance in the full year to February during which revenue topped US$362 million.

Prospects for an Econet Wireless dividend to shareholders registered in its books by May 30, 2010 are expected to buoy its share price and continue lifting the Zimbabwe Stock Exchange main industrial index as investors jostle to grab the blue-chip firm’s shares. The index surged 2,64 percent on news of Econet profits.

The Econet Wireless share is currently trading between US$5,35-US$5,40, from just about US$4,80 for the most part of last year, since the company announced a solid set of results early this week.

With profit after tax standing at a phenomenal US$113 million, earnings before interest, tax, depreciation and amortisation (EBITDA) stood at US$179,3 million while earnings per share were perched at US$0,66.

The sky can only be the limit for Econet Wireless considering that its subscribers stood at over four million in January while the firm targets to have reached five million subscribers by next August.

This means potential for increased revenue, even when many other companies wail over tight liquidity in the market, which has constrained demand, remain very bright for Econet Wireless.

The company indicated that it is not about to stop its ambitious network expansion to increase capacity and efficiency and plans to double investment by another US$300 million in the current financial year.

Already, the massive capital investment over the last financial period saw a huge leap in the company’s income statement which stood at US$397,7 million in February from US$182 million last year.

This positive change occurred as property, plant and equipment grew from US$137,4 million to US$267,5 million while equipment deposits increased from US$2,2 million to US$47,7 million.

A hugely exciting year for Econet Wireless, during which the firm boldly stated that it could achieve in one year what it could not achieve in 10 years, ended with the company US$13,9 million cash positive.