PHILLIMON MHLANGA
TELECOMS giant Econet Wireless Zimbabwe Limited has swung to a ZWL$1.3bn loss in the six months to August 2019 from a profit of ZWL$305m in the prior comparative period weighed down by the depreciation of the local currency.
This is the first time that Econet, one of the blue chip counters on ZSE, has reported a loss in 10 years, a mirror of the deteriorating economic environment.
It has now warned of a bleak outlook due to biting hyperinflationary environment experienced in Zimbabwe.
Hyperinflation, Econet said, has affected customers’ purchasing power. The results were also weighed down by depreciating local currency, resulting in the company incurring huge exchange losses.
The group’s total revenue fell 13% to ZWL$1.3bn in the reviewed period from ZWL$1.5bn in the comparative period last year.
Total assets grew to ZWL$8bn from ZWL$6bn.
In a statement accompanying the company’s inflation adjusted sets of accounts published Monday, Econet board chairman,James Myers, said: “The group’s results for the period under review were significantly weighed down by the accelerated depreciation of the local currency. As a result of outstanding foreign currency obligations, the group recorded foreign exchange losses of ZW$1.9bn.”
He added: “Hyperinflation has affected our customers negatively as consumer purchasing power has declined and consequently affected the viability of all businesses in Zimbabwe.
“Due to the inflationary conditions in the country tariffs are lagging behind inflation. Voice, SMS and data tariffs charged in Zimbabwe are now amongst the lowest in Africa. This is at a time when the country is experiencing up to 18 hours of power outages and our network is running almost exclusively on diesel generators, a situation which is clearly untenable.”
Myers said the company and other operators continue to implore the POTRAZ and the government to consider the impact of these debilitating challenges on the viability of the sector and the negative impact on our ability to offer quality service to customers.
