Brighter horizons for Econet
STAFF WRITER
Econet Wireless Zimbabwe is poised for substantial future growth, buoyed by strategic investments in technological innovation and infrastructure, according to a leading consultancy firm.
Genesis Management Consultancy’s analysis of Econet’s financial results for the fiscal year ending February 29, 2024, highlights a significant increase in revenue, driven by consistent demand for its telecommunications services.
The report titled “Gen-ius Insights” underscores Econet’s strategic focus on adopting cutting-edge technologies and maintaining robust infrastructure as pivotal to its growth trajectory.
“The adoption of 5G technology is expected to enhance operational efficiencies and customer service delivery, aligning with global trends and customer expectations,” stated Genesis.
This transition is anticipated to position Econet competitively within the global market, driving both operational performance and customer satisfaction.
However, the consultancy also noted the challenging financial landscape.
Econet encountered substantial exchange losses totalling ZW$3.2 trillion, severely impacting profitability.
Additionally, the macroeconomic environment remains fraught with difficulties, including foreign currency shortages and price instability.
In response, Econet’s management is proactively seeking long-term funding solutions and engaging with regulatory bodies to mitigate economic pressures.
The company’s cash flow forecasts suggest it has sufficient resources to sustain operations, emphasizing financial stability through prudent asset management and strategic investments.
Econet’s inflation-adjusted revenue surged to ZW$14.75 trillion for the review period, up from ZW$6.34 trillion in 2023, demonstrating strong growth amid economic challenges.
Despite this, the company posted a loss of ZW$1.10 trillion, largely due to the significant exchange losses and monetary adjustments.
Total assets as of February 2024 stood at ZW$12.14 trillion, a slight decrease from ZW$13.26 trillion in 2023.
Notably, non-current assets, primarily property, plant, and equipment, remained stable at ZW$10.43 trillion.
Genesis commended the company’s modernization efforts, highlighting the upgrade of over 1,012 4G sites and plans for 550 more as evidence of Econet’s commitment to infrastructure enhancement.
The report also detailed changes in the company’s financial assets at fair value through other comprehensive income, which decreased from ZW$2.86 trillion in 2023 to ZW$2.51 trillion in 2024.
This reduction was primarily due to a significant fair value loss, partially offset by new additions. Despite the decrease, these assets remain strategically important, with notable investments in the Zimbabwe Stock Exchange and Liquid Telecommunications Holdings.
Econet’s total equity fell to ZW$7.86 trillion from ZW$8.17 trillion, reflecting the impact of retained earnings losses.
However, non-current liabilities decreased to ZW$1.45 trillion from ZW$1.67 trillion, and current liabilities also reduced to ZW$2.83 trillion, indicating improved liability management.
A notable achievement in 2024 was the significant reduction in the company’s interest-bearing debt, which decreased from ZW$1.29 trillion in 2023 to ZW$260.18bn.
The maturity and subsequent redemption of unsecured debentures, which amounted to ZW$920.29m in 2023, were facilitated by successful rights offer that raised US$30.3m
