Econet to release interim results

ECONET Wireless Holdings Limited (EWH), the Zimbabwe Stock Exchange-listed group operating the country’s largest mobile cellular network, says it is on track to release its first interim results next month since it changed its year-end period to February.

Analysts sa

id the group, a top pick among institutional investors and fund managers, should release “above market expectation” results when it releases its interim results next month.

The group, which also has interests in the internet, public pay phone, financial transaction services and the banking sector, changed its year-end to comply with tax regulations.

A spokesman confirmed that Econet was now in a closed period while results are being prepared and these would be released to shareholders and presented to analysts “at a date yet to be fixed next month”.

“Econet now has a policy to release its results early in order to allow shareholders to make a fair valuation of the group’s performance and make informed decision, particularly in this hyper inflationary environment,” said group spokesman Sure Kamhunga.

Econet’s year-end results covered eight months to February 2006 and showed that Econet achieved gross revenue in inflation-adjusted terms of $4,3 billion ($4,3 trillion before currency revaluation) and operating profit of $1,2 billion ($1,2 trillion), while its subscriber base went up to 457 228 and is believed to have already exceeded that mark by a wide margin.

The group has been one of the best performing stocks since the company’s debut on the Zimbabwe Stock Exchange in September 1998 when its stock was then trading at only $10 per share.

The group was on Wednesday trading at over $2 000 per share and is among the five biggest companies on the stock market in terms of market capitalisation at $163,8 billion  or US$655 million at the ruling exchange rate.

Kamhunga said Econet Wireless chief executive Douglas Mboweni had assured the market that the current expansion work to release 300 000 additional lines before the end of the year would not result in the suspension of dividend payments by the group, one of the few listed Zimbabwean companies that pays two dividends a year.

The expansion is being financed by a US$20 million loan from the African Import-Export Bank, which will be repaid using revenue earned from Econet’s international roaming service.

“This is the second largest such expansion Econet has undertaken in less than two years, having completed another project to increase capacity to 500 000 using part proceeds of cash obtained when the group sold its 14% stake in Botswana’s largest mobile network company, Mascom Wireless,” said Kamhunga.

When this current expansion is completed, Econet says it will have increased its subscriber base to more than 800 000, making it by far the single largest telecommunications company in Zimbabwe, with a customer base that exceeds the combined total of all the fixed as well as the two mobile networks in the country. — Staff Writer.