ECONET Wireless Zimbabwe Limited’s profit after tax declined by 37% to $14,9 million in the half-year-ended August 31, due to the declining revenue attributed to the deteriorating economic environment.
BY VICTORIA MTOMBA
In the same period last year, profit after tax was $23,8 million.
Revenue declined by 6,7% to $301,5 million in the six months ended August 31 on declining voice calls due to the emergence of applications such as WhatsApp.
In the comparable period last year, revenue was $323 million.
The decline in revenue comes, as revenue from data and mobile financial services grew during the period under review. Data revenue grew by 10,5% to $58 million from $52,5 million, while EcoCash revenue grew by 13,6% to $39,2 million up from $34,5 million in the comparable period last year.
Econet Wireless Zimbabwe board chairman, James Myers said the growth in data and mobile financial services revenue “validates our strategy, which we commenced a few years ago, to grow non-voice revenues”.
“We have, therefore, continued to focus on cost reduction in order to protect margins and profitability. Although the cash position continues to be healthy, the nostro account funding constraints are being experienced by all local banks have adversely affected our ability to meet US dollar-denominated commitments on time,” he said.
Myers said the depletion in the country’s foreign currency reserves, evidenced by a recurrent balance of payments deficit, has made it difficult for all companies to make payments to foreign capital goods and services.
Myers said the company has been unable to make certain debt repayments on time, notwithstanding that cash was available in local banks accounts.
“This situation is expected to persist. We have engaged our lenders and continue to explore mutually acceptable solutions,” he said.
Myers said the on-going liquidity challenges have hampered efforts to invest to meet demands. Resultantly, the capital expenditure intensity decreased to 5,1% from 16,6% during the same period last year, he said.-AMH
