BUSINESS REPORTER
EcoCash Holdings Zimbabwe Limited (EHZL) intends to penetrate regional markets, a move meant to spread risk and protect shareholder value in the face of local currency volatility.
EHZL board chairperson Sherree Shereni said in a statement accompanying the company’s financial results for the year ended February 28, 2023 the group was actively looking at scaling our various businesses, enhancing the product offering and diversification of its products in line with growth ambitions.
“The group continues to scout the local and regional markets for strategic opportunities which complement our vision of a digitally connected future that leaves no Zimbabwean behind,” Shereni said.
EcoCash is also planning to raise additional US$30.3m from its shareholders through a rights issue.
Shereni said the only available option is to raise the required foreign currency from members through the renounceable rights offer as the company is unable to secure foreign currency for purposes of redeeming the debentures from the auction,
“A renounceable rights offer of US$30.3m of new ordinary shares in the capital of the company is under consideration. The business has competing needs for the limited foreign currency generated by the company with priority being given to the financing of the upgrade and maintenance of the digital platforms in use by the group,” Shereni said.
EcoCash posted a ZWL$4.76bn loss for its financial year to February 28, 2023, owing to monetary exchange losses worth ZWL$30.1bn linked to its failure to redeem debentures.
EcoCash, together with sister company Econet Wireless Zimbabwe, in April this year, announced their failure to raise enough forex to redeem their remaining debentures from a 2017 rights offer worth US$130m.
The capital raise was done to service a foreign debt worth over US$100m for work done to help both entities, before their unbundling into separate entities, upgrade and maintain their network infrastructure.
EcoCash Holdings reported revenue of ZWL$101,3bn in the year to February, compared to ZWL$96,8bn in FY22, a 5% increase from the prior year.
Shereni said while the regulatory restrictive limits on the mobile money business, as well as the general cash economy on the US$ transactions put pressure on the revenue numbers, significant growth has been noted in transaction volumes and values following the reduction in IMTT [intermediated money transfer tax] to 2% in January from 4%.
“Seventy-eight percent of our revenue was driven by the Fintech business followed by Insurtech at 17% and lastly, digital platforms at 5%, in line with the prior year’s performance.
“The group achieved an EBITDA [earnings before interest, taxation, depreciation, and amortisation] margin of 7% against 18% in the prior year mainly due to the pressure on costs due to the prevailing operating environment,” Shereni said.
Total assets grew to ZWL$198.1bn during the period under review, from a 2022 comparative of ZWL$154.34bn, this was largely owing to a revaluation of property and equipment and investment properties.
The growth was also attributed to gains in investment properties.
