Econet reports 10pct drop in full-year profit

Econet reports 10pct drop in full-year profit

HARARE, May 31 (The Source) – Econet Wireless, Zimbabwe’s largest telecommunications company, has reported a 10 percent fall in annual profit to $36,2 million, citing a decline in consumer spending.

Revenue dropped 3 percent to $621,7 million in the period  from $641 million recorded in the previous year while earnings before interest, tax, depreciation and amortisation (EBITDA) declined  by six percent to $224 million from $238,4 million.

The telecomms giant in January this year went into the market to raise $130 million from its shareholders to settle outstanding foreign loans as Zimbabwe struggled with a crippling dollar shortage and delays in foreign currency payments.

Chairman James Myers said data and mobile financial services businesses contributed 32 percent to revenue from 14 percent in the first half of a financial year ended February 28, 2015 as voice revenues continue to take a dip.

Myers said the company was still owed over $26 million by its local interconnect partners as at its year end on February 28.

“The inability to obtain the payments also affects our investment decisions as this cash flow is necessary in order to meet the costs of providing the interconnect services on the network,” Myers said in a statement.

Cashflow from operations declined  to $173,7 million from $198,9 million previously.

The company reduced its interest bearing debt by 42,7  percent to $127,8 million from $223,1 million. Finance costs as well declined to $26,73 million from $28,3 million.

Total assets increased by 2,32 percent to $1,22 billion from $1,2 billion previously.

The company lowered its capital expenditure by 60  percent to $32,5 million compared to $82,8 million in the previous year.

It declared a dividend of 0,467 cents per share amounting to $12,1 million for the year. The number of subscribers increased by 2,49 percent to 10,3 million in the period from 10,02 million recorded in the previous period.

Myers noted that a new five percent government tax on airtime means the telco was paying 28,8 cents on every dollar earned to the state for various levies.

Econet has paid over $1,3 billion to government and statutory bodies since dollarisation in 2009, he added.