Mobile money and banking segments continue to be the linchpin sudsidiary for diversified financial technology firm, Cassava Smartech, although its contribution to total revenue for the year to February 2020 was lower compared to the previous period.
Cassava’s revenue rose to $4,6 billion for the year under review, from $1,1 billion.
EcoCash’s contribution to total revenues was 89 percent from 91 percent.
And management attributed the lower contribution level to the group’s successful diversification strategy.
“Despite the challenges in the obtaining operating environment, Cassava recorded a revenue of $4,6 billion, compared to four months revenue for the period ended February 2019 of $1,1 billion,” said Cassava chairperson Dr Sherree Shereni in a statement accompanying the results.
“Mobile money and banking businesses contributed 89 percent (FY2019: 91 percent) of total revenue for the year.
“The decline in percentage contribution for the fintech business segment reflects the positive effects of the group’s revenue diversification strategy.
“The ongoing transformation of the business within Cassava remains a priority as we work on scaling up the new businesses and diversifying our revenue earnings for sustainability.”
Growth in the group’s other segments was largely driven by the digital on-demand agriculture platform, which caters for both smallholder and large-scale commercial farmers.
There was also notable growth in the non-motor business for the short term insurance business unit, highlighted management.
“Our life business (EcoSure) maintained solid performance, anchored on innovative digital on-boarding platforms, as well as enhanced product mix to cater for the cross profile of the segments we service,” said the chairperson.
The fintech group recorded an increase in gross profit margin to 68 percent from 57 percent in 2019 and in the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to 29 percent, from 27 percent in the prior year.
“This increase occurred despite the pressure that the economic environment has continued to place on the business margins.
“To mitigate this, the business embarked on an elaborate cost optimisation drive to complement the revenue generation initiatives being implemented,” said Dr Sherree.
Management lamented the continued depreciation of the Zimbabwe dollar against the US dollar which had a significant impact on the company’s financial performance
“We realised foreign exchange losses amounting to $2 billion. At the reporting date, the group had net foreign liabilities amounting to US$42,8 million, of which US$30,5 million comprise of the Cassava’s 50 percent allocation of the overall liability in the debentures issued by Econet Wireless Zimbabwe Ltd,” said the group.
For the year just ended, the board voted not to declare a dividend, “on the need to hedge the company against the negative effects of the foreign currency translation adjustments on the bottom line.”