Econet seeks US$307m to cement dominance

Econet released an impressive set of financial results for the full year ended February 29 2012, in which it reaped the benefits of a surge in mobile penetration rate made possible by the company’s heavy investment in network expansion.

Econet’s gross revenues for the year topped US$611,1 million, 24% ahead of last year’s US$493,5 million, as the group pumped in US$183,5 million into network expansion. This brought its total expenditure on network expansion over the last three years to US$614 million.

“The investment has widened the competitive gap by increasing the market share to over 70% in just under four years,” the company said in a statement accompanying its financial results.

Whilst the country’s mobile penetration rate increased by 8% from 66% in the prior year to 74% in the year under review, Econet’s  subscriber base jumped by 16% to 6,4 million from 5,5 million in the same period.

The addition of value-added products such as data services drove Econet’s average revenue per customer 6% up from US$89 in the previous year to US$95 in 2012.

Earnings Before Interest, Tax and Depreciation Ammortisation (EBITDA) increased by US$48,1 million to US$290, 8 million, whilst profit after tax was a staggering US$165,7 million, up 18% on the previous year’s US$141,0 million.

The EBITDA margin remained stable at 48% (49% in 2011), reflecting the company’s strong profitability, whilst the debt to equity ratio declined from 86% to 65%, indicating the group’s growing reliance on internal financing in the year under review.

The company’s total assets grew by US$175,9 million, largely reflecting the group’s investment into network expansion, whilst cash generation remained strong, with net cash and cash equivalents rising from US$34,7 million in the prior year to US$100,7 million in the year under review.

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