News / National
Econet pays $89bn in statutory obligations
06 Jun 2023 at 06:21hrs | Views
ECONET Wireless Zimbabwe contributed $89 billion to the Government coffers through various statutory payments in the financial year ended 28 February 2023.
The amount is a significant jump of 256 percent from $25 billion paid in 2022.
The financial report released last week indicates that during the period under review, the Zimbabwe Stock Exchange-listed company's revenue recorded a 20 percent rise driven by growth in voice and data usage of 19 percent and 58 percent respectively.
Despite the revenue increase on account of usage, the earnings before interest, taxation, depreciation, and amortization (EBITDA) margin decreased from 52 percent to 40 percent for the year under review.
"The disparity between the revenue growth and EBITDA margin is reflective of the sub-economic tariff environment coupled with accelerated exchange rate depreciation," said Econet.
"The local currency lost value by more than 85 percent during the year under review, which had a negative impact on overall profitability.
"The group incurred exchange losses of ZWL$77 billion, which translated to 23 percent of revenue against a prior year comparative rate of six percent of revenue."
During the period Econet said the business invested US$66 million as part of its network modernization programme, adding that the network expansion and upgrades remain imperative to support business sustainability, which has been hampered by several years of under-investment, due to ongoing macro-economic challenges.
The communications firm said as it pursues its vision of a digitally connected future that leaves no Zimbabwean behind, it will continue to innovate in order to give a unique digital experience to customers.
"The consumption of digital services is expected to continue growing. We have a strong platform to anchor our transition to a fully-fledged digital services provider. Exploiting 4G and 5G network-enabled opportunities will be key to keeping abreast with emerging global trends and improving service delivery."
The amount is a significant jump of 256 percent from $25 billion paid in 2022.
The financial report released last week indicates that during the period under review, the Zimbabwe Stock Exchange-listed company's revenue recorded a 20 percent rise driven by growth in voice and data usage of 19 percent and 58 percent respectively.
Despite the revenue increase on account of usage, the earnings before interest, taxation, depreciation, and amortization (EBITDA) margin decreased from 52 percent to 40 percent for the year under review.
"The disparity between the revenue growth and EBITDA margin is reflective of the sub-economic tariff environment coupled with accelerated exchange rate depreciation," said Econet.
"The local currency lost value by more than 85 percent during the year under review, which had a negative impact on overall profitability.
"The group incurred exchange losses of ZWL$77 billion, which translated to 23 percent of revenue against a prior year comparative rate of six percent of revenue."
During the period Econet said the business invested US$66 million as part of its network modernization programme, adding that the network expansion and upgrades remain imperative to support business sustainability, which has been hampered by several years of under-investment, due to ongoing macro-economic challenges.
The communications firm said as it pursues its vision of a digitally connected future that leaves no Zimbabwean behind, it will continue to innovate in order to give a unique digital experience to customers.
"The consumption of digital services is expected to continue growing. We have a strong platform to anchor our transition to a fully-fledged digital services provider. Exploiting 4G and 5G network-enabled opportunities will be key to keeping abreast with emerging global trends and improving service delivery."
Source - The Chronicle
