ZIMBABWE’S largest mobile network operator, Econet Wireless Zimbabwe registered a $6,8 billion growth in revenue, but slid into a $1,3 billion loss for the year to February 29, 2020, from a profit of $680 million in the prior year weighed down by foreign exchange losses.
Group chairman Mr James Myers revealed the group’s exposure in foreign currency denominated obligations resulted in exchange losses of $ 6,1 billion.
“The group continued to engage the Central Bank on the settlement of legacy debts at the prescribed rate of $1 to US$1 in line with the blocked funds framework announced by the Central Bank,” said Mr Myers in a statement accompanying the group’s financial results.
A loss before tax of $960 million was recorded compared to a profit before tax of $283 million in the previous year.
Basic loss per share was 56,3 cents from basic earnings per share of 28 cents.
The business, however recorded a 31 percent increase in revenue to $6,8 billion, while Earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 4 percent to $2,7 billion, representing an EBITDA margin of 39 percent being maintained.
The focus on operational efficiencies resulted in margin being maintained despite the pressures resulting from general price increases in the economy as well as the increase in network operational costs.
The business performed a professional revaluation of its property, plant and equipment for the year ended 29 February 2020 as the associated value in Zimbabwe dollars was no longer meaningful due to inflation.
“Most of the Company’s assets were procured in foreign currency,” said Mr Myers.
In terms of market share, the group recorded a 10 percent increase in subscriber base to 12,6 million subscribers while market share for voice traffic and data traffic also increased to account for 79 percent and 73 percent respectively.
The growing digitalisation of the economy has necessitated investment towards infrastructure that supports increased online services such as online education, health and business digitalisation initiatives.
Said Mr Myers: “To date, we have a 3G population coverage of about 70 percent for data services across the country, and, inclusive of our 4G coverage, we now have 90 percent of the population covered by data-capable base stations, although based on the internet penetration rate, only 59 percent of the population have access to internet services.”
However, power outages posed challenges to network availability forcing the group to resort to alternative sources of energy subsequently increasing costs.
Despite the challenges, the group is upbeat of maintaining efficiency and improved capacities.
“Our people are well trained and have extensive experience in managing technological transitions that have taken place in the telecommunications industry over time.
“Although investments in our platforms have been limited, we believe that the plans and initiatives we have for the future will result in an enhancement of the capacity and capabilities of our systems,” said Mr Myers.