Shares leave Masiyiwa whistling merrily

ECONET Wireless founder Strive Masiyiwa is smiling even more broadly this year —  Econet   stock went up 400% from last year when the stock market re-opened.

By last July, Masiyiwa would have cashed out US$221 million on his 73 million class “A” shares if for some strange reason, he had decided to sell his shares in the mobile phone operator.

If he had taken the decision this week, Masiyiwa would have earned a cool US$346 million on his 73 million class “A” shares at Tuesday’s closing price of US$4,74 a share.

According to the group’s annual report, Masiyiwa’s 3,9 million ordinary shares held through Econet Wireless Global Ltd, are worth US$18,4 million.
At Tuesday’s trading price of US$4,74, Masiyiwa’s total shareholding in Econet would have been worth US$364 million, US$2 million more than last week.

If Econet shares increase by US2 cents, Masiyiwa’s worth increases by US$1,461 million. If Econet stock moves up by a cent, his wealth on class “A” shares alone increases by US$730 696.

Add his shareholdings on the ZSE (some of it held through associate companies), his net worth is about US$700 million. Add this to other operations outside Zimbabwe then he becomes a billionaire.

Analysts say Econet stocks still have an upside to burn.
Though Masiyiwa is smiling, the mainstream market value fell to US$3 billion by last Wednesday from a peak of US$3,9 billion late January.
Against such a value, Masiyiwa’s fortune in Econet alone is close to 10% of the ZSE.

Strangely, value of other shares decreased by US$900 million, a figure almost at par with the 2009 national budget of US$1 billion.
Daily sales on the market have tumbled to US$400 000 from US$2 million.

Despite hostile market conditions, Econet continues to tighten its grip on the mobile phone business in the country, aided by new funding coming in to speed up its network expansion programme.

Management says the company will invest US$300 million this financial year in network upgrades and expansion after a further US$93 million was put in the business last year.

Econet will pay out S$23 million in dividends to its shareholders this year.

But analysts said the company might be overdoing things in terms of capital expenditure, warning financing such debt would prove costly.
The mobile phone operator declared a US$0,06 dividend making the full year cumulative dividend to US$0,14 after the company initially declared US$0,08 in the interim.

Masiyiwa got US$6 million in dividends last year after the group declared an 8-cent dividend.
Dividends for class “A” shares are much higher. It is not clear how much he got this year but he normally chooses to get additional shares instead of cash because as a non-resident Zimbabwean, the tax-man gets 15% of the dividend share.

Profit after tax stood at US$113 million, earnings before interest, tax, depreciation and amortisation stood at US$179, 3 million while earnings per share were US$0,66.

Chris Muronzi

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