Econet profit down 37 percent

Zimbabwe’s largest telecommunications company, Econet Wireless, has reported a 37 percent decline in after-tax profit in the half year ended 31 August 2016, as revenues continue to decrease in a worsening economy.

In results released todsay, Econet said its profit after tax for the half year was $14.97 million, down from $23.8 million in the same period last year.

“Profitability was affected by the decline in revenues as a result of the difficult economic environment. We have therefore, continued to focus on cost reduction in order to protect margins and profitability,” the company said in its results statement.

First half revenue was $301.5 million, 6.7 percent lower than the from $323 million in the prior year. Earnings before interest, tax, depreciation and amortisation (EBITDA), at $105.9 million was 13.6 percent lower than in the first half of the previous financial year.

Econet’s flagship cellular network operations contributed 42 percent (51 percent in 2015) to net profit in the first half, lower than the group’s ‘other’ business segments — financial services, insurance, beverages and investments — which accounted for 57 percent (46 percent in 2015) of total net profit.

This was on the back of positive contributions by data revenue, up 10.5 percent to $58 million, and mobile money service EcoCash, whose revenue jumped 13.6 percent to $39.2 million in the period under review.

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