Econet suffers ZW$6.1 billion exchange losses

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  • The Group posted a loss of ZW$135 billion
  • Operations were significantly impacted by the power disruptions
  • Revenue increased by 31%

Harare – Econet Wireless Zimbabwe Limited (EWZ) recorded a staggering exchange losses amounting to ZW$6.1 billion during the year ended 29 February 2020 stemming from the devaluation of the local currency against the US dollar.

In a statement accompanying the group’s financial results for the period under review, the Group chairperson Dr James Myers said the Group continued to engage the Central Bank on the settlement of legacy debts at the prescribed rate of ZW$ 1 to US$ 1 in line with the blocked funds framework announced by the Central Bank.

The Group has a positive net foreign currency exposure as a result of its investment in Liquid Telecommunications Holdings Limited, which is valued at US$ 135 million,” he said.

The Group posted a loss of ZW$135 billion in inflation adjusted terms during the period under review from a profit position of ZW$681 million in 2019.

The business experienced a 31% increase in revenue, in inflation-adjusted terms, to ZW$ 6.8 billion. Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) decreased by 4%, from the previous year, to ZW$ 2.7 billion, representing an EBITDA margin of 39% being maintained.

The Group’s operations during the period under review were significantly impacted by the power disruptions which resulted in poor network services and increased operating cost.

Mr Myers said, “Our network, during the peak of load shedding required over 3 million litres of diesel to operate optimally. This is a cost inefficient way to power the network as 1 kW of diesel power is 3-times more expensive than 1 kW of solar power, limiting the number of base stations that could be operated in this manner.

“These service disruptions also affected mobile money services across the country as the disruptions are common to all networks”.

As a result, the Group’s operational costs increased due to the need to constantly service the generators and also run an extensive fleet of fuel refilling tankers to ensure that network availability remained at an acceptable standard.

Going forward, Mr Myers said although investments in our platforms have been limited, we believe that the plans and initiatives we have for the future will result in an enhancement of the capacity and capabilities of our systems.

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