Home / Business / Econet after tax profit slides 20% after Cassava demerger

Econet after tax profit slides 20% after Cassava demerger

Econet Wireless Zimbabwe Limited (EWZL) posted a profit after tax of ZWL$106,4 million in the year ended February 28, 2019 from a comparable figure of ZWL$132,3 million in 2018 following the unbundling of Cassava Smartech Zimbabwe Limited (CSZL).

CSZL which is the holding company for Ecocash, Steward Bank, Steward Health and Econet Insurance was unbundled from EWZL in December 2018 and subsequently listed on the Zimbabwe Stock Exchange.

EWZL retained a 20% stake in CSZL which is valued at more than ZWL$1, 1 billion.

In a statement accompanying the group’s financial results, chairman James Myers said the results under review include CSZL performance of eight months.

Total revenue for the period increased from ZWL$831,6 million recorded in 2018 to ZWL$1,1 billion.

Revenue from demerged operations amounted to ZWL$328 million compared to ZWL$258 million last year.

Finance income more than doubled from ZWL$456 million to ZWL$1,4 billion in the period under review.

Myers said capital investment during the period was restrained due to shortages of foreign currency.

“Capital investment in infrastructure development was subdued for the period under review due to limited access to foreign currency. This has a negative impact on our ability to sustain a comprehensive service offering as we transition to a digital economy,” he said.

“Econet continues to pursue data revenue growth initiatives in response to the increased use of internet services driven in part by the growth in adoption of smart phones by our customers, as the prices of these devices continue to fall. Strategic partnerships with key vendors remain a priority for the business”.

In the period under review EWZL commissioned a total of 116 solar powered sites, reducing generator runtime, fuel consumption and the related carbon dioxide emissions.

“The Group will continue to collaborate with smart technology businesses in Cassava SmarTech for separate value creation objectives whilst recognizing and leveraging the synergies that have historically existed between the two separate entities,” he said.

The company paid a dividend amounting to ZWL$ 50 million.

This story corrects the previous version published earlier which was titled “Econet swings to $106,4m loss after tax”

Source :

newsday

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