Econet in massive jump in F18 profit as fintech shines
Tinashe Makichi
HARARE – Econet Wireless Zimbabwe Limited posted a 265 percent jump in profit for the year to February 28, 2018 recording $132, 3 million from $36, 2 million of the previous year.
This jump in PAT was on the back of an exceptional performance within the financial technology segment which encompasses EcoCash, Steward Bank, remittances and payment solutions.
The telecoms giant’s revenue for the period went up to $832 million driven by strong performance across all its business segments.
“The company no longer has exposure to any foreign currency external United States Dollar denominated amortising debt, following the rights offer. The capital expenditure to revenue ratio increased to 12 percent against a prior year comparative of 5 percent mainly driven by critical network acquisitions to improve service delivery,” said the group at a results briefing yesterday.
The telecoms firms’ debt to equity ratio stood at eight percent from the period under review, against a prior year comparative of 18 percent.
“The increased expenditure was partly to address the under-investment from the previous period. We continue to seek solutions to address the investment gap so that we consistently provide world-class services to our customers,” said the group.
The EBITDA margin went up to close at 41 percent, an increase from 36 percent in the previous year. Having transformed the business into a fully converged technology business, our voice and SMS services have declined to about 40% of total revenues.
Using technology, the group has been able to develop products and services that enrich the lives of our customers. “Our operating model, in all the business segments that we operate, is premised on understanding the needs of customers and tailor making products and services to meet their needs and expectations. This strategy has been validated by the increase in the number of customers subscribing for our services and the overwhelming response to our customised product offerings,” said the group.
On segmental performance, Steward Bank added 176 000 new customers, by providing easily accessible, low cost financial services and improving financial literacy.
The bank recorded a profit before tax of $32, 7 million, up from $8, 4 million reported in the prior financial year. Steward Bank’s net operating income jumped by a huge 133 percent to $70, 2 million.
EcoCash increased its merchant footprint to over 50 000 merchants, resulting in a growth in merchant payments. The number of banks integrated to the EcoCash platform increased to 12.
Meanwhile, Econet’s subscriber base has risen to 11, 4 million subscribers from 10, 3 million, an increase of 1, 1 million new subscribers.
