company results

ECONET THE TOP PERFOMER

Econet Wireless Zimbabwe the country’s biggest telecommunication company has just made public its interim results for the period ending 31 August 2011 and these results continue to reaffirm the company’s blue chip status. For a company that started operations in 1998, this has to be one of the most remarkable success stories of the country’s entrepreneurs particularly now as it has become the second largest capitalised company on the stock market after Delta Corporation.

The highlights of Econet performance include an increase in turnover by 24% from $235.4 million in the interim period last to $290.8 million this time around while earnings before tax and interest rose 14% from $114.9 million to $131.2 million. There is no doubt that this is a very good performance which not underlies the company’s own proficiency but also underscores the importance of a stable macro-economic environment. In fact since the adoption of the multiple currency system in 2009, Econet as well as other well managed companies have reaped heavy rewards and certainly it appears the trend will continue as long as the underlying economic fundamentals remain unchanged.

The other noteworthy feature of Econet’s performance is its cash generation capacity which reached $139.5 million while its debt leveraging improved from a high figure of 86% by the 28^th of February 2011 to about 68%. While this has been a concern for some, it is however this company’s interest covers which was 10.9 times thus signifying the company’s ability to meet its obligations timely. Econet got to be in this very dominant position courtesy of major investments in infrastructure and equipment which commenced soon after the dollarization of the economy. To date the amount invested stands at $ 470 million and clearly this explains its current popularity as evidenced by the number of subscribers-5.5 million as at 31 August 2011. This investment is of course reflected in the balance sheet which shows that Econet had property and equipment worth about $450 million while the total assets were $667 million as at 31 August 2011.

On the stock market Econet wireless is one of the most liquid and stable stocks, attributes which are not very common of many Zimbabwe Stock Exchange listed shares especially in this dollarization era.  Presently the Econet stock is trading at around 400 cents which gives it a market capitalisation of about $680 million and according to results just released the earnings per share increased from 38 cents to 44 cents. Going forward Econet will continue to focus on developing innovative value added services and enhancing the customer experience as has been evidenced by its latest product the eco-cash, a mobile money transfer and payment. These value added products have in the past drove clients to the Econet stable and there is doubt these products will keep them there thus helping Econet to maintain its dominant position.

For further info on Econet stakeholders can log on to www.econet.co.zw