Econet posts $17b (US$15m) loss, down ZW$57b from last year’s profit, actual position likely worse

Leonard Sengere Avatar
Econet Zimbabwe, Joina City, Econet Shop, USD

If I asked you how valuable ZW$5000 was this time last year, you would struggle to answer that. You would only get an idea of the value by looking for an invoice from that time, or by trying to remember what the price of something that’s not subject to price controls was.

So, when Econet says their revenue increased from ZW$282 billion in the year ending February 2022 to ZW$339 billion in the year ending February 2023, does it clear things up for you? I don’t imagine it does, even though they say that those figures are inflation adjusted.

You can’t look at Econet reporting that they went from a profit after tax of ZW$39.6 billion last year to a loss of ZW$17 billion this time around and understand what happened. It really could be not as bad as it sounds or it could be much worse than it appears.

In fact, even Econet says,

The Directors caution users of the financial statements on the usefulness of these reported financial statements, considering distortions that arise when reporting in a hyperinflationary economy.

I would agree with that statement. This is not them trying to hide behind that in the wake of disappointing financial results. It really is hard to make sense of monetary values from 15 months ago, when the financial year they are reporting on started.


To adjust for inflation, Econet turned to the Consumer Price Index. They “estimated and applied inflation rates for February 2023 based on the Total Consumption Poverty Line published by ZIMSTAT.”

They used a conversion factor of 3.23 to convert figures as of February 2022. You can verify this yourself by checking that the historical revenue of ZW$67 billion for 2022 was adjusted to ZW$282 billion in the inflation-adjusted accounts.

Now, it is up to you to determine whether you think that conversion factor is accurate. Personally, I would argue it should be higher because I think the ZW$ lost more value than that 3.23 conversion factor suggests.

Here’s a simple way to visualise what actually happened

Here’s the thing, we know that the official exchange rate is not representative of what’s on the ground. So, let’s see what the parallel market exchange rate reveals about the figures Econet is reporting.

  • ZW$ against USD on 28 February 2022 – 1:240
  • On the 28th of February 2023 – 1:1150

So, that would mean the historical ZW$67 billion revenue figure on 28 Feb 2022 was worth around US$279 million on that date. The historical ZW$282 billion for 2023 was worth US$245 million. In this case, revenue fell by US$34 million.

There’s more to it than this but this paints a clearer picture in my mind.

So, in the inflation-adjusted financials, Econet reports a revenue increase of ZW$57 billion (USD$50 million on that date using the black market rate of 1:1150). However, the simple USD/ZW$ exchange rate movement suggests otherwise. The real value of the revenue fell.

Econet already reports a loss of $17 billion. Meaning they went from a profit of $40 billion to a loss of $17 billion, a $57 billion drop. If we convert that to USD, it’s a $50 million swing.

If we use the exchange rate movements to estimate the actual drop in profits, we find profits fell from $40 billion (US$167 million last year – 1:240) to a loss of $17 billion (US$15 million). That would mean a drop in profits, a swing of US$182 million. Much worse than the US$50 million that the inflation-adjusted accounts suggest.

However, this doesn’t mean the simple way I used to translate these accounts is accurate. Not at all. There are faults with this approach too. I would argue it’s closer to the actual picture since the CPI they had to use is inaccurate as many argue.

The usefulness of Econet’s financials

Let’s go back to the directors’ caution. “The Directors caution users of the financial statements on the usefulness of these reported financial statements…”

My own calculations paint a much gloomier picture than theirs and neither is accurate. Hyperinflationary environments are tricky.

You have to agree these financials have dubious utility at best. That is if you consider the values reported. However, the rest of the non-monetary information contained therein is valuable. We shall be looking at those in more detail. Let’s leave these dollar amounts behind.

Also read:

Econet, EcoCash looking to raise US$30.3 million each to pay back debt, hence the rights offers

Econet taking in 81.2% of total data revenues and extracting more from each customer than NetOne and Telecel

Does Econet’s 1130% profit increase even mean anything? Benefiting from relatively low tariffs?


  1. Imwe Mbeu

    This doesn’t look good

    1. No Ofcourse not

      Hahaha someone is about to go closy wosy on us

  2. Anonymous

    I guess it’s Time to raise the tariffs again

    1. Hugh Jarse

      This will see another “Tariff Adjustment” post, like so many other firms have done. Everyone knows damn well that they really mean “huge increase”, but it’s not PC to say so, Not that one should expect anything else, as zpf are still destroying what’s left of Zimbabwe’s infrastructure, economy and currency, with, it seems, the full blessing of citizens! Yes, I’m talking about you lot, who’ve been stupid enough to give change a chance, and can’t be bothered to minimise, let alone ztop, zpf’s destructive, murderous rule!

  3. Anonymous

    Can’t help but laugh at you trying to analyse Hyper Inflation Financials. I suggest you go enrol for a short course on financial reporting. Until then Sir, Stay away from this territory. πŸ˜‚πŸ˜‚πŸ˜‚πŸ˜‚πŸ˜‚πŸ˜‚

    1. Anonymous

      It’s really terrible

    2. Leonard Sengere

      You may have missed the point my friend. I’m familiar with IAS 29 and the current purchasing power approach. That’s all well and good, they used all that to prepare the accounts. The question remains, how did they determine the current purchasing power of the items in their accounts? They explicitly tell us that they turned to the Consumer Price Index. That is a problematic index, at best. So, it can’t possible reflect a true and fair view.

      Hence why I simply looked at what the amounts were worth using the black market rate at different dates. To gauge the USD value of the amounts they reported.

      Tell me how that’s not a reasonable way to get an idea of what actually happened. And also tell me how the CPI is reliable.

      1. Anonymous

        Sir Leonard,

        In as much as looking at alternative money market rates makes business sense, Econet directors have a moral, legal (Statutory) and regulatory (IFRSs) obligation to report their results quoting a widely published and recognised CPI. Simply informs how they restated their transactions and balances to match current trends.

        Using alternative market rates movements may not be permitted by reporting standards as these may not be adequately regulated or tracked. I wouldn’t know though, as ours is a peculiar situation, of any easily identifiable variable that can be used in place of CPI and that is permissible under the applicable reporting standards.

  4. Musoro bhangu

    I usually like your articles but the way this articles is so wrong and misinformed is mindblowing. Maybe find someone who actually understands to write other articles or stick to actual tech. And I only know this because I am an accountant. Makes me start to wonder if your other articles are misinforming

    1. Samaita

      Instead of kuvukura pano kkkkk why not give a brief analysis of what you think as an accountant? Your knowledge, if shared that way, will help many like me who are illiterate kkkk in that area. Shooting down someone’s analysis and not giving an alternative answers is really, really dumb!

      1. πŸ––πŸ½


      2. Bounty hunter

        Very true @samaita wamupindura zvandada.. nyc move

    2. Bounty hunter

      @musoro bhangu utori musoro bhangu for nothing

    3. Leonard Sengere

      What do you know nhai Musoro bhangu? That the CPI is reliable? You disagree with Econet who are saying these financials are mostly useless in light of an inaccurate CPI and a fast depreciating reporting currency?

      We love the conversations. Let’s have them and not just say, “you’re wrong and misinformed.” Where? How? Let’s talk about it. Make your case for why you think hyperinflationary accounting is foolproof, especially in Zimbabwe.

  5. Kim Jong Un The Emperor Of North Korea

    Man I hate people who think they are soo smart , always shooting down people , If you didn’t like the article then shut the faak up and shove your Accounts up your ass , Financial report this πŸ–•πŸ–•you pencil pushing , number crunching aassholes , stuck on a boring aasss job , wasted your lives picking boring aaass careers.

  6. Martin Ezekiel Ravi Charles

    Superb News

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