Econet Wireless Zimbabwe posts firm results with dividends for shareholders

Econet Wireless Zimbabwe announced its financial results today for the period ending February 2014. The financial services and telecoms company is the country’s largest mobile services provider by subscriber number and provides a host of services through its network and financial institution, Steward Bank.

After tax profit for the period stood at $119.4 million. $20 million of the profit will go to pay dividends and the balance will be reinvested in the business and used to pay off loans from international banks. This declaration of a dividend for its shareholders will be the first time in three years the company has done so.

Other highlights from the announcement included the following:

-Econet Wireless will pay a dividend of 1.29 cents per share to its 9000-plus shareholders for the first time in more than three years.

-Revenue for the year had has grown 8%, largely driven by the growth in data and overlay services.Voice revenue growth had remained flat as voice had now matured.

-Broadband grew by 62% and EcoCash by 307%, contributing more than 14% to the overall revenue for the year.

-The entire Econet Wireless Zimbabwe portfolio, which also includes Mutare Bottling Company and Steward Bank, had a turnover of $752.7million for the twelve months

Here’s the full press release from Econet Wireless Zimbabwe.

Econet returns to dividend

Econet Wireless will pay a dividend of 1.29 cents per share to its 9000-plus shareholders for the first time in more than three years.

The company, which has paid out more than $900 million to the government in taxes, fees and duties over the last five years, is the only operator that has paid the full license fee of $137.5 million to the government for the renewal of its licence.

Announcing the results for the year ended February 2014, Econet Wireless Zimbabwe CEO, Mr Douglas Mboweni, said revenue for the year had has grown 8%, largely driven by the growth in data and overlay services. Voice revenue growth had remained flat as voice had now matured.

He said that with penetration now in excess of 103%, new customers coming onto the network were no longer able to contribute significantly to growth in revenue.

“Everyone in the country who wants service now has it. So, although we added over 780 000 new subscribers over the last 12 months, they did not help to increase revenue.”

He pointed out that broadband and new services such as EcoCash were growing very rapidly, and were helping to offset the slowdown in SMS. Broadband grew by 62% and EcoCash by 307%, contributing more than 14% to the overall revenue for the year.

“When you reach more than 100% penetration of service in any country, it means that virtually everyone now has a phone. This situation is not unique to Zimbabwe. It has happened elsewhere, and so we had long anticipated it and had begun to invest heavily in new services. We are beginning to see the fruit of that work.”

In terms of the results, Econet Wireless Zimbabwe, which operates services only in Zimbabwe and also operates Mutare Bottling Company and Steward Bank, had a turnover of $752.7million for the twelve months, from which it generated a profit after tax of $119.4million. Only $20million of the profit will go to pay dividends and the balance will be reinvested in the business and used to pay off loans from international banks. The company is currently repaying $228 million in debts to various international banks.