Econet in massive losses amid harsh Zimbabwe economy


Econet Chairman, James Myers

from DANAI MWARUMBWA in Harare, Zimbabwe
Zimbabwe Bureau
HARARE, (CAJ News) – ECONET Wireless Zimbabwe has reported major losses in the first half of the year amid a tough operating environment in the country.

In abridged consolidated financial statements for the period ending August 31, the group stated it incurred a loss before monetary adjustment of ZW$24 billion (US$70 million) against a prior period comparative loss of ZW$40 billion (US$120 million) resulting from inflationary pressures in the economy that affected profitability.

The mobile operator reported exchange losses from US dollar-denominated liabilities driven by the weakening local currency continue to have a negative impact on performance.

During the period, the group incurred exchange losses amounting to ZW$375 billion (US$1,125 billion), representing 34 percent of revenue against a prior period comparative of 39 percent.

In the first half of 2023, shareholders approved the rights offer scheme to raise US$30,3 million (YES, IN US$ that’s how it is quoted, don’t confuse with ZW$) in fresh equity to redeem US dollar-denominated debentures that matured at the end of April.

In light of the ongoing capital expenditure program of the group, the directors resolved not to declare an interim dividend for the half-year.

Despite the financial setbacks, Econet leveraged the partnerships with our major equipment vendors to modernize its network after several years of under-investment.

From an investment level of less than 5 percent of revenue in previous years, capital investments for the period rose to 24 percent of revenue in the period under review.

As a result, it modernised 252 base station sites in the first quarter, and 439 base station sites in the second quarter, covering the capital Harare and Bulawayo, the second city.

The network modernisation entails replacing old equipment that had limited capacity or is no longer supported by the vendors.

“The modernized equipment has better performance, capacity and coverage,” James Myers, Econet board chairperson, stated.

This year, the country’s biggest telco, with 16 million subscribers, commemorates its 25th anniversary in the Southern African country.

Looking forward, Econet disclosed artificial intelligence and process automation will be pivotal in improving operational efficiencies and customer service delivery.

– CAJ News

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