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Business Reporter
ECONET Wireless Zimbabwe’s profit for the half-year to August 31, 2016 fell 37 percent to $14,9 million on depressed revenue due to the challenging economic environment.Total revenue for the period fell 6,7 percent to $301,5 million compared to $323 million reported during the same period last year.
Econet chairman Dr James Myers said the challenging economic environment characterised by liquidity constraints and low foreign currency reserves had a knock on effect on the business in the period under
review.
“Profitability was affected by the decline in revenues as a result of the difficult economic environment.
“The nostro funding constraints being experienced by all local banks have adversely affected our ability to meet US dollar denominated commitments on time.
“The situation is pervasive to all sectors of the economy,” said Dr Myers.
In addition to that, in the period industry regulator, the Postal and Telecommunications Regulatory Authority of Zimbabwe suspended promotions across the industry and promulgated the Quality of Service Regulations into law.
“While the company has strived to meet these standards, the ongoing liquidity challenges have hampered our efforts to continuously invest to meet increasing capacity demands. Consequently, our capital expenditure intensely decreased from 16,6 percent to 5,1 percent,” said Dr Myers.
EBITDA for the period under review was 13,6 percent weaker to $105 million from $122,5 million recorded in the same period last year.
However, data revenue for the period increased 10,5 percent to $58 million. According to POTRAZ there has been a marked decline in voice traffic and a rising internet and data usage traffic as subscribers opt for cheaper methods of communications such as Facebook, WhatsApp and Skype
The mobile cellular market showed a declining trend with a 27 percent shrinkage in total traffic from 7,06 billion minutes in 2014 to 5,2 billion minutes in 2015.
Mobile financial services unit – EcoCash recorded a 13 percent revenue increase for the period.
The country has been experiencing cash shortages in banks resulting in an increase in the use of plastic money as well as mobile money platforms.
In line with this and the need to boost EcoCash, the group entered into partnerships with international money transfer agencies inclusive of MoneyGram, Western Union and World remit.
“EcoCash now has partnerships with nine various MTAs. Our EcoCash platform continues to grow supported by a wide network of agents and merchants that accept EcoCash as a mode of payment,” said Dr Myers.
Econet did not declare a dividend.
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