FINANCIAL HIGHLIGHTS
- Revenue up 7% to ZWG 5.0 bn
- EBITDA down 2% to ZWG 2.3 bn
- Voice Usage up 36%
- Data Usage up 56%
CHAIRMAN’S STATEMENT
Introduction
The re-integration of the fintech business into our Mobile Network Operations has enabled us to leverage synergies to enhance customer experience, expand our ecosystem and drive growth.
Our digital transformation journey over the years continues to yield positive results as we adopt new operating models that are driving operational excellence. The business has repositioned itself to address the impact of emerging technologies by deploying 4G/5G technologies in addition to offering competitively priced bundled services. We introduced SmartBiz, a package that offers unlimited internet packages at affordable prices.
Network infrastructure modernization
The continued network infrastructure modernization programme has had a positive impact on the business as we launched initiatives to improve customer experience and launch new business lines. The upgrade of our core network is proceeding as planned. The upgrade will provide increased network performance as well as unlocking new capabilities that will allow the business to offer new, exciting and personalized services for our customers as well as support the transition to a full digital services provider.
In working towards our vision of “a digitally connected future that leaves no Zimbabwean behind”, we have deployed an additional 32 5G base stations in Harare with an additional 120 sites planned. With this densification, the maximum user throughput has increased significantly, and the business is already realizing significant traffic growth in combined data market share, improved quality of service and user throughputs. We expect that this aggressive roll out of next generation data connectivity will allow us to improve user experiences and increase our ability to compete at a level of quality and capacity that is truly world class.
We continue investing in alternative and green power solutions as the national grid power supply remains erratic. The ongoing initiatives include the upgrade of alternative power for our data centres to ensure uninterrupted services to our customers.
Environmental, Social and Governance (ESG)
Contributing to a sustainable future remains a key imperative of the Group and our ESG framework, which is aligned with global sustainable development goals, ensures that we are well-positioned for the challenges and opportunities ahead. We continue to drive digital inclusion by prioritizing stakeholder value, keeping our customer promise, fostering community development, and addressing climate change, to create a more equitable and sustainable world.
We continue to work with Higherlife Foundation to assist orphaned and vulnerable children by giving them access to educational opportunities. In addition, Higherlife Foundation delivered vital equipment to three major hospitals in the country and supported training to improve maternal health outcomes.
Financial performance
The Group acquired the financial technology businesses from EcoCash Holdings. Further details of the transaction were shared in our Circular to Shareholders. The financial results of the acquired businesses were, with effect from 1 March 2024, consolidated as subsidiaries into the Group results and are reported as the Mobile Money and InsurTech segments.
Mobile Network Operations (MNO)
Data and voice usage grew by 56% and 36%, respectively, relative to the first half of last year, enabled by the ongoing network modernization. Demand for data continued an upward trajectory and translated to a revenue contribution of 47% against 38% at the previous comparative period, while voice revenue contribution reduced to 41% from 49% largely on account of the increase in data usage.
Capital expenditure for the period which was largely channeled towards the modernization of the network infrastructure amounted to 26% of revenue against a prior period comparative of 10%. The shift in customer needs from traditional services such as voice and short message services (SMS) to data intensive services underscores the need for the business to be innovative and to invest appropriately to ensure that customer experience is not compromised. Network expansion and upgrades which all require foreign currency remain imperative to support business sustainability and offer competitive services.
Financial technology (FinTech)
Anchored by the mobile money and the insurance businesses, the FinTech segment has been actively pursuing opportunities to expand its customer reach. The mobile money business recorded a 26% growth in revenue, driven by an increase in subscribers. Wallet funding increased by 47% driven by a combination of increased cash-in transactions, payroll processing into wallets and international remittance receipts. Efforts to onboard more payment partners are ongoing, as the business aims to establish a payment platform that prioritizes convenience and value for customers. The growth in mobile money volumes and transactions reflects gains we continue to make towards improved financial inclusion.
The InsurTech business achieved a marginal 3% revenue growth compared to the same period last year. The life insurance business continues to offer affordable funeral cover accessible exclusively on mobile phones. Growth in revenue for the short-term insurance business against the prior year was driven largely by new business acquisitions and endorsements. The InsurTech business also saw favorable claims ratios compared to industry benchmarks over the period, reflecting sound operational efficiencies and effective risk management practices.
Dividend
The Company declared and paid interim dividends of 0.41 US cents and 0.26 US cents for the half year in respect of all the qualifying ordinary shares of the Company.
Outlook
By leveraging synergies between the MNO and FinTech businesses, the Group has set itself to be in a strong position to grow faster, diversify our product offering and continue creating shareholder value, whilst responding to the evolving needs of our customers.
The Group remains focused on leveraging emerging technologies to enhance our service offerings. The ongoing network modernization and increased 5G footprint positions us to deliver faster and more reliable services. The modernised network will offer more capabilities and better support AI-driven tools which will enable delivery of personalized customer services through intelligent chatbots and optimize network performance through real-time analytics. By harnessing the power of AI, we aim to create a more intuitive and seamless experience for our customers across all business segments.
Appreciation
On behalf of the Board, I would like to extend my appreciation to my fellow Directors, management and staff for their continued commitment towards the vision of our business. I wish to also extend the Board’s profound appreciation to our customers and stakeholders who continue to support the Group in various ways.
By order of the Board of Directors
Dr. J. MyersChairman of the Board
24 October 2024
DOWNLOAD: Econet Wireless FY2025 Half Year Financial Results.pdf
