Econet valuation hits US$1.11bn

SAMANTHA MADE

Publicly traded Econet Wireless Zimbabwe has received a major valuation uplift, with FBC Securities estimating the telecoms giant’s intrinsic equity value at US$1.11bn..

The advisory firm says the revised valuation is anchored on a blended model combining discounted cash flow analysis, enterprise value/earnings before interest, tax, depreciation and amortisation (EBITDA), and price-to-book ratios, an approach reflecting firmer free-cash-flow expectations and sustained profitability.

According to FBC Securities, Econet’s strengthened outlook is being driven by “robust volume recovery, strong corporate governance and EBITDA margins above 45%,” positioning the group for meaningful value accretion in the medium term despite persistent regulatory and macroeconomic pressures.

The valuation update follows Econet’s release of its half-year results to August 2025 (HY2026), which showed clear signs of operational recovery. Revenue grew 38%, propelled by a surge in data usage, improved network uptime, and early gains from the group’s ongoing modernisation of its transmission and radio-access network.

Data traffic doubled year-on-year, while voice usage climbed 34%, supported by the rollout of 26 new lightweight base stations, 27 additional 2G/3G/4G sites, and 100 new 5G sites across the country. The expanded infrastructure has significantly strengthened network capacity and broadened coverage, particularly in underserved rural areas.

Econet’s digital and fintech units also delivered strong performances. EcoCash transaction volumes increased 35%, while its InsurTech businesses — Ecolife, Moovah and Maisha — recorded customer-growth rates of 50%, 31% and 63% respectively.

The group maintained an EBITDA margin above 45%, supported by ongoing cost-optimisation initiatives, the deployment of AI-driven operational tools, and enhancements to digital customer-service platforms, including upgrades to the MyEconet app and expanded capabilities for the Yamurai WhatsApp assistant.

However, FBC Securities cautions that despite the improving fundamentals, investor sentiment remains muted in the near term. Concerns include prolonged regulatory uncertainty around tariff adjustments — a critical factor for revenue sustainability — and questions over the consistency of quarterly dividend payouts.

As a result, the firm projects a more conservative 12-month sentiment-adjusted target price of US$0.25–0.28 per share, below intrinsic value but still materially higher than the current market price of US$0.19.

“At prevailing levels, the counter presents deep value,” FBC Securities noted, adding that a re-rating toward fair value will depend on improved tariff visibility, continued EBITDA resilience and greater clarity on dividend policy.

Econet says it remains committed to disciplined capital deployment, expanding 5G capability, deepening digital inclusion and advancing its artificial-intelligence initiatives. Management also underscored its focus on enhancing customer experience amid the complexities of a hyperinflationary economy and a tightly regulated operating environment.

The company declared two interim dividends during the period — 0.63 US cents and 0.60 US cents per share,  reflecting confidence in its cash-generation capacity, though management signalled caution on future declarations pending regulatory developments.