Dandemutande entering EBITDA profitability. Here’s the ownership structure after merger

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Masawara, the holding company that owns a stake in Dandemutande announced its 2015 annual results yesterday. According to the results, Dandemutande, after years of losses, was now entering profitability at an EBITDA level based on the 2015 fourth quarter performance. The internet provider is however still held down by finance costs and still incurred a loss after tax.

Part of why the profitability is the merger of the provider with iWayAfrica Zimbabwe and Africa Online which happened last year. The merger brought new efficiencies to the business resultantly increasing gross margins significantly from 31% to 40%. The new merged company, the results say, restructured and re-negotiated supplier contracts based on their new size of business.

Though Dandemutande hasn’t disclosed numbers, after combining the 3 ISPs, it’s become of the Zimbabwe’s largest internet providers in terms of subscriber base. Zimbabwe’s internet space therefore now has a group of the big 3, so to speak: TelOne, Liquid/ZOL and Dandemutande.

Dandemutande new shareholding

The Masawara results also detail the new shareholding structure of Dandemutande after the merger:

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  • Telerix has 50.5% in the new Dandemutande. Telerix is itself 50% owned by Masawara and 50% by the old Dandemutande shareholders (mostly founders from when the business was started in the late 90s.) Because of this Masawara effectively holds 25.3% of the new company.
  • Gondwanaland International Networks (GIN) own who already owned iWay and AfricaOnline now have 49.5% of Dandemutande.
  • GIN have the management contract to run Dandemutande. This explains the management changes that happened soon after the merger, with iWayAfrica leadership essentially taking over.
  • Interestingly the Africa Online and iWayAfrica shares of the Gondwana share are noted individually – that is 22.75% and 26.75% respectively. This makes it clear that when Mweb and AfricaOnline were bought by Telkom almost 10 years ago, they never really became one company and even after Gondwana bought them, they remained separate businesses.
  • GIN’s management contract means that even though Telerix has a 50.5% share of Dandemutande, it doesn’t control the company as they don’t have power because to control the business activities.

You can read the full results here.

 

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