ZIMBABWE’S largest mobile network operator, Econet Wireless (Econet) Zimbabwe, has reported a 14,7% slump in after tax profit to US$119,4 million for the year ended February 2014 owing to a growth in depreciation and amortisation.
The network provider said depreciation and amortisation as a percentage of revenue increased by 4% in the period under review.
Profit margin slid from 20% in 2013 to 16% in the current year due to higher capital costs, according to Econet. Revenues for the period stood at US$752,7 million, 8% up from US$695,8 million prior year.
Earnings before interest tax and amortisation stood at US$332,2 million, 10% up from US$302, 4 million in 2013.
Depreciation, amortisation and impairment costs went up 42% to US$101,7 million from US$71,6 million in the previous comparative period.
Group CEO Douglas Mboweni said going forward, the company would focus on investment in new technologies, sustainable growth, improving business efficiency and optimising financial return.
Group chief finance officer Roy Chimanikire said subscribers went up 10% to 8,8 million.
He said revenue growth was after 307% increase in EcoCash revenue for the period under review.
Ecocash handled over US$4,5 billion since it was launched with over 170 million transactions processed since its launch in 2011.
Over 1 million accounts have been opened since it was launched with over 10 000 agents countrywide.
Data revenue also went up 62% to US$72 million.
Non voice revenues grew to US$139 million up from US$69 million in 2013.
Broadband revenue grew 62% to US$72,4 million driven by increase in data capable devices and investment in infrastructure.
Chimanikire said there was scope for growth in data business, currently at 10% of revenue, due to low smart device penetration and credit facilities for smart phones under Steward Bank.
Net cash generated from operations grew 138% to US$347,8 million after a US$53,3 million tax payment on US$401 million total cash generated. Total cash generated from operations was 86% up from 2013.
Cash and cash equivalents at the end of the reporting period stood at US$71,3 million, 9% down from prior year. This was after factoring in US$283,4 million cash used in investment activities.
A total US$139,7 million was used for acquisition of property, plant and equipment, while US$141,6 million was spent on acquisition of intangible assets. A further US$2,1 million went into other investment activities.
Cash used in financing activities stood at US$71,2 million.
Total assets went up 16% to US$1,173 billion after a 25% growth in property, plant and equipment and intangible assets growth to US$884,1 million and a 75% growth in other noncurrent assets to US$58,8 million.
Current assets however, slid 16% in value to US$230,7 million.