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NewsDay

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Econet after tax profit declines

Telecommunications
ZIMBABWE’S largest mobile phone operator Econet Wireless’ after tax profit for the full year to February declined to $139,9 million from $165,7 million.

ZIMBABWE’S largest mobile phone operator Econet Wireless’ after tax profit for the full year to February declined to $139,9 million from $165,7 million recorded during the previous year due to a rise in finance costs.

Business Reporter

Despite recording a 14% growth revenue to $694,8 million, finance costs nearly trebled last year’s figure of $10,2 million.

The company revenue grew on the back of growth in value added services such as EcoCash and broadband. EcoCash, whose subscribers were up 62% to 2,1 million is a mobile money service. The agency network that operates the Ecocash business witnessed a growth of 242% to close at over 3000 agents, thereby improving the national payment system.

Econet’s connected subscribers rose to eight million during the period under review from 6,5 million subscribers.

“Broadband continues to gain popularity due to its high speed, excellent quality and the most extensive coverage of any operator in Zimbabwe. Data subscribers increased by 52% from 2,1 million to 3,2 million in the year under review,” the company said. Earnings before Interest, Taxation, Depreciation and Armortisation recorded a margin of 44%. Total assets surpassed the $1 billion mark as of the reporting date, registering a growth of 25% from last year.

The debt to equity ratio, a measure of a company’s financial leverage calculated by dividing its total liabilities by stockholders’ equity improved to 54% from 65% as at February 28 this year.

Meanwhile, Econet has become the first mobile phone company to comply with the revised operating licences fees.

Government last week hiked mobile phone operators’ licence renewal fees by 37% to $137 million while the tenure for the same licence was extended from 15 years to 20 years. Communications and Infrastructural Development minister Nicholas Goche said the new fee structure was triggered by developments in the telecoms sector, which have made the industry one of the fastest growing in Zimbabwe.