News / National
EcoCash overturns loss into profit
13 Nov 2023 at 05:47hrs | Views
EcoCash Holdings Zimbabwe Limited (EHZL), a FINTECH company, successfully transformed its financial performance, turning a loss into a profit of ZWL$130.19 million after tax for the half-year ending August 31, 2023. This positive shift was attributed to a substantial 254.43% forex gain.
In the corresponding period of 2022, EHZL had incurred a loss of ZWL$1.68 billion. Notably, the company reported foreign exchange gains, excluding debenture-related liabilities, amounting to ZWL$74.84 billion, marking a 254.43% increase compared to 2022.
EHZL's chairperson, Sherree Shereni, outlined in a statement accompanying the financial results that the group adjusted its strategy to effectively navigate the evolving business landscape and capitalize on emerging opportunities.
Shereni highlighted that EcoCash Holdings achieved a revenue of ZWL$218 billion during the period, representing a 40% growth compared to the previous year's ZWL$155 billion. The fintech business, particularly EcoCash and Steward Bank, played a pivotal role, contributing 76% to the revenue, followed by insurtech at 20%, and digital platforms at 4%.
Emphasizing the growth drivers, Shereni noted, "The fintech business's performance was propelled by new product innovations and an increase in forex revenue contribution, a result of intentional growth in the US$ business."
The forex gains, excluding debenture-related liabilities, translated into a net monetary gain of ZWL$34.42 billion. Despite facing exchange losses, EHZL achieved a net profit position of ZWL$167 billion associated with the debentures, which were resolved through capital raised in a renounceable rights offer. This resolution is anticipated to contribute to improved profitability in the future.
During the review period, EHZL expanded its reach by increasing the number of merchants accepting USD EcoCash, catering to the predominantly dollarized economy. The company also reintroduced the EcoCash Express Debit Card linked to EcoCash USD accounts, providing users with the flexibility to transact, withdraw cash, and make online purchases at zero monthly fees.
Shereni highlighted additional initiatives, such as Steward Bank's launch of Steward Pay, an online payment gateway facilitating local and international transactions, and the introduction of the Q-Not account opening platform by the Digital Bank in April.
Administrative expenses for EHZL remained consistent at ZWL$90 billion, akin to the 2022 comparative. However, other expenses, cost of sales, and external services exhibited increases of nearly 10%, 148%, and 10%, reaching ZWL$37.59 billion, ZWL$57.6 billion, respectively.
Total assets experienced significant growth during the period, surging by 62.03% to ZWL$930.75 billion from the end of the previous financial year on February 28, 2023.
Shereni concluded by affirming EHZL's commitment to developing innovative and inclusive products, enhancing customer experience, and ensuring equitable access to financial and digital services.
In the corresponding period of 2022, EHZL had incurred a loss of ZWL$1.68 billion. Notably, the company reported foreign exchange gains, excluding debenture-related liabilities, amounting to ZWL$74.84 billion, marking a 254.43% increase compared to 2022.
EHZL's chairperson, Sherree Shereni, outlined in a statement accompanying the financial results that the group adjusted its strategy to effectively navigate the evolving business landscape and capitalize on emerging opportunities.
Shereni highlighted that EcoCash Holdings achieved a revenue of ZWL$218 billion during the period, representing a 40% growth compared to the previous year's ZWL$155 billion. The fintech business, particularly EcoCash and Steward Bank, played a pivotal role, contributing 76% to the revenue, followed by insurtech at 20%, and digital platforms at 4%.
Emphasizing the growth drivers, Shereni noted, "The fintech business's performance was propelled by new product innovations and an increase in forex revenue contribution, a result of intentional growth in the US$ business."
The forex gains, excluding debenture-related liabilities, translated into a net monetary gain of ZWL$34.42 billion. Despite facing exchange losses, EHZL achieved a net profit position of ZWL$167 billion associated with the debentures, which were resolved through capital raised in a renounceable rights offer. This resolution is anticipated to contribute to improved profitability in the future.
During the review period, EHZL expanded its reach by increasing the number of merchants accepting USD EcoCash, catering to the predominantly dollarized economy. The company also reintroduced the EcoCash Express Debit Card linked to EcoCash USD accounts, providing users with the flexibility to transact, withdraw cash, and make online purchases at zero monthly fees.
Shereni highlighted additional initiatives, such as Steward Bank's launch of Steward Pay, an online payment gateway facilitating local and international transactions, and the introduction of the Q-Not account opening platform by the Digital Bank in April.
Administrative expenses for EHZL remained consistent at ZWL$90 billion, akin to the 2022 comparative. However, other expenses, cost of sales, and external services exhibited increases of nearly 10%, 148%, and 10%, reaching ZWL$37.59 billion, ZWL$57.6 billion, respectively.
Total assets experienced significant growth during the period, surging by 62.03% to ZWL$930.75 billion from the end of the previous financial year on February 28, 2023.
Shereni concluded by affirming EHZL's commitment to developing innovative and inclusive products, enhancing customer experience, and ensuring equitable access to financial and digital services.
Source - newsday
