Listed technology group, Cassava Smartech Zimbabwe recorded a loss of ZWL$1.59bn in the six months to August 31 2020 from a profit of ZWL$27.6m in half year due to exchange losses and subdued transactions during the lockdown period.
“Exchange losses continue to weigh-down on business performance, with an amount of ZWL$2.4bn having been recorded in the period under review in respect of the foreign obligations that the group currently has,” Cassava board chairperson, Sherree Shereni said.
Revenue for the group tumbled 34% to ZWL$5.4bn from ZWL$8.2bn recorded during the same period in 2019 due to the Covid-19 induced interruptions to economic activity, as well as the pressure from various regulatory pronouncements, both of which had a significant impact on the revenue of the group. Total assets for the group shrunk 33% to ZWL$14.4bn from ZWL$21.4bn.
Cassava’s flagship subsidiary, EcoCash revenue contribution to the group’s revenue at 63% during the reviewed period, was a decline 73% recorded during the same period in 2019 owing to macro-economic factors and regulatory changes that took place during the period under review, as well as contribution from the exponential growth in the Insurtech and on demand service business units.
Steward Bank’s contribution remained stable and is expected to maintain that revenue share on the back of the system upgrade project due to be completed in December.
During the reviewed period, The Reserve Bank of Zimbabwe (RBZ) issued several regulatory directives which have impacted the business.
The directives include a revision of customer transaction limits, suspension of certain user and transaction categories, banning of multiple wallets for individuals.
In compliance with SI 80 of 2020, EcoCash has now integrated with ZimSwitch, which the RBZ designated as a national switch.
Cassava has also applied to RBZ for EcoCash to be designated as a national switch.
Shereni said the group has prioritised the health and welfare of its staff, customers, and other stakeholders since the onset of the Covid-19 pandemic.
The advent of Covid-19 has also accelerated Cassava’s digital transformation journey, enabling the technological firm to realise cost efficiencies without loss of productivity.
Cassava has embraced virtual working for its staff and designed virtual access platforms to continue serving the customers.
The group capitalised on this virtual space and this accelerated digital thrust to come up with new products and services that better respond to the evolving needs of the customers. Management focused on cost containment to preserve margins.
Meanwhile, the core banking system upgrade at Steward Bank is due to be completed in December 2020 and will be instrumental in driving the bank’s digital agenda.
The upgrade will also enhance regulatory compliance initiatives, whilst enhancing Steward Bank’s ability to offer a wider scope of services on its digital platforms.
The system now has capacity to complete 450 transactions per second from an average of 200 transactions per second before the upgrade.