Leading Zimbabwean operator Econet Wireless has released its financial results for the year ended February 2014, revealing after tax profits of US$119.4 million, allowing it to pay dividends for the first time in three years.
The company said turnover for the year reached US$752.7million across its operations, which include the Mutare Bottling Company and Steward Bank alongside its mobile network services.
Of the profits achieved, Econet said US$20 million will go towards paying a US$0.0129 per share to its more than 9,000 shareholders, while the rest will be reinvested and used to repay US$228 million in debt to international banks.
Revenues grew by eight per cent fuelled by data and overlay services, and the subscriber base grew by 780,000 new customers over the year, although Econet said market saturation – with Zimbabwe seeing 103 per cent mobile penetration – means new subscribers do not actually impact on revenues.
“Everyone in the country who wants service now has it. So, although we added over 780,000 new subscribers over the last 12 months, they did not help to increase revenue,” said Douglas Mboweni, chief executive officer (CEO) of Econet Wireless Zimbabwe.
“When you reach more than 100 per cent penetration of service in any country, it means that virtually everyone now has a phone. This situation is not unique to Zimbabwe. It has happened elsewhere, and so we had long anticipated it and had begun to invest heavily in new services. We are beginning to see the fruit of that work.”
Broadband offerings and the EcoCash mobile money service contributed over 14 per cent of total revenues, with broadband services growing by 62 per cent and EcoCash uptake expanding by 307 per cent, which helped offset the downturn in SMS services, Econet said.
The operator said it has paid US$900 million to the government in taxes, duties and fees over the last five years, and highlighted the fact it is the only operator to have paid the full US$137.5million fee charged for the renewal of its licence.
Wholly-owned subsidiary of Econet Wireless, Steward Bank, saw losses of US$26.3 million over the year, however Mboweni said he is confident of profits soon, given the bank’s critical role in the development and management of the EcoCash service which now processes transactions worth more than US$350 million a month.
“In terms of our strategy, the revenue model of Steward Bank was always going to be pinned on EcoCashSave and EcoCashLoan. We first of all had to get the money transfer services up and running before launching these other services. We have now launched these services in the last few months. By this time next year, you will see a very different Steward Bank,” Mboweni said.
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