Masawara PLC, investors in Dandemutande, announced its 2013 financials today revealing that Dandemutande made a third consecutive annual loss in the year. Dandemutande made an EBITDA loss $2.1 million.
The loss has however decreased year on year by about 41%, from the $3.6 million incurred in 2012. According to the report Dandemutande is also registering strong growth in business evidenced by 46% growth in revenue year on year, most of it a result of a 107% revenue growth in the uMax service. Utande, wholesale and corporate bandwidth arm of Dandmutande also registered 30% growth in revenue.
Cash flow problems
Dandemutande has not been spared the current liquidity challenges facing the economy and the report says there’s doubt the company can survive without further injection of cash. “The losses and cash flow constraints experienced by Telerix (the Masawara company that owns 50% of Dandemutande) cast doubt on the ability of Telerix to continue as a going concern without financial support.” The report says therefore that Masawara has pledged to provide further funds at the request of Telerix.
Hope for a better 4th year
Says the report: “The Directors believe that Telerix will break-even during 2014. Masawara Plc will continue to provide financial support to Telerix Communications (Private) Limited, as the company focuses on consolidating its market share and increase its revenue base”.
It’s hard to predict how the economy in general will perform in 2014 and what impact this will have on Dandemutande’s chances at breaking even this year. What is clear though is that the internet services sector continues to be even more competitive and uMax deals that were simply amazing this time last year, are now just an ordinary offer facing competition from similar offers (or better) from the competition.
It’s also not clear if uMAX has been able to expand its network fast enough so they can sign up more people to WiMAX services.