$1,55bn windfall for Econet shareholders
Econet Wireless Zimbabwe shareholders will receive over $1,5 billion after the firm declared 60 cents per share dividend for the half year to August 2021.
The mobile telecommunication company posted an after-tax profit of $8 billion, in historical terms, during the period under review, after a huge turn around from the $4 billion loss recorded in the same period last year.
Econet chairman James Myers said the dividend, which indicates the company’s commitment to deliver long-term shareholder value as well as reflects on its confidence in its financial position and ability to generate significant cash flows, will be paid on or about 16 December 2021.
According to the Zimbabwe Stock Exchange, Econet has 2 590 577,000 shares in circulation and this translates to $1 554 346 200 from a dividend of 60 cents per share.
“In the period under review, revenue increased by 95 percent to $29,6 billion, in inflation adjusted terms, anchored by the increased contribution of data services. Data revenue grew by 136 percent and our voice services revenue increased by 92 percent,” he said while presenting the group’s financial results.
“Aggressive cost management resulted in earnings before interest, taxation, depreciation and amortisation (EBITDA) margin improving to 55 percent from 47 percent in the comparative period,” he added.
The listed mobile network service provider’s exchange losses, arising from foreign currency denominated obligations, decreased from $15,2 billion to $481 million in the half year period.
These losses relate to the movement in the exchange rate on the foreign currency auction system and the consequent impact on the value of foreign currency liabilities,as expressed in the reporting currency.
In inflation adjusted terms, the telecoms giant recorded a $6,6 billion profit after tax up from a loss of $127,6 million recorded in the half year to August 2020, while revenues, in historical terms, surged from $6,7 billion to $27 billion.
Meanwhile, spurred by this strong performance, Econet is set to become the first telecommunications company to roll out a 5G network in Zimbabwe in the coming few months in response to rising demand for mobile broadband services.
“During the period under review, we upgraded our 4G network in Harare and Chitungwiza and this increased the data browsing speeds by 1,5 times. This reflects our commitment to improve customer experience. 18 new base station sites were commissioned across the country to provide network connectivity in new suburbs that were previously unserviced.
“We plan to commission over 215 new LTE sites country-wide to improve network quality and availability. In the next few months, we will start our 5G journey as we pivot to the next stage of our digital evolution,” said Dr Myers.
5G is essentially fifth-generation mobile network technology which offers faster data speeds and lower latency or response time as it allows several devices to be connected at one go and in future could help in running unmanned cars and seamless communication and interconnectivity between smart devices, a process commonly called the Internet of things.