NetOne posts US$10m profit

Tawanda Musarurwa Senior Business Reporter
State-owned mobile telecommunications firm, NetOne, recorded a US$10,2 million profit for the year ended December 31, 2018, a massive turnaround from a US$77 million loss position previously.

Revenue for the period grew 13 percent to US$119,1 million from US$105,5 million on the back of improved income from the data revenue stream.

“Data contribution to revenue firmed from 26 percent to 37 percent indicative of shifting customer needs and preferences supported by our increasing social media engagement,” said chairman James Mutizwa.

The growth in mobile data usage for NetOne was also buoyed by the company’s move to optimise its network across the country.

Management said the telecoms operator’s network availability is currently at 99 percent, up from 95 percent prior to April 2018.

This came on the back of re-farming of 137 2G sites across the country, thereby availing 3G services in these areas.

Additionally, NetOne’s subscriber base also improved during the period under review.

Subscribers were up 25 percent to 3,3 million from 2,6 million previously.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew from US$15,1 million to $38,2 million, translating to a 153 percent growth in cash generated by operations.

Management attributed the improved performance to the implementation of cost containment initiatives during the period under review.

Indicative of this was a 21 percent decline in overheads margin, to close the period at 48 percent compared to 69 percent previously.

Said chief executive officer Lazarus Muchenje:

“The year commenced with a focus on narrowing the liquidity gap, I am pleased to report that the company has made strides in doing so with a major milestone being the reduction of negative working capital by 74 percent from US$228,6 million to US$59 million over the year to December 31, 2018.

“A quality balance sheet remains a key focus area for NetOne, as the restructuring of our balance sheet remains critical for us to build the necessary capacity for a sustained momentum and flexibility that a cash-rich company benefits from.

“Because the health of our balance sheet matters, NetOne’s primary focus is to narrow the liquidity gap and restore value of the entity, which has been earmarked for partial privatisation.”

NetOne also saw an improvement in its mobile money platform — One Money — whose market share increased by 32,7 percent to 2,5 percent last year as 1,2 million subscribed to the platform following its rebranding in 2017.

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