Listed telecoms giant, Econet is expected to see continued growth in earnings for the current financial year and going forward, according to analysts’ projections.
The growth is expected to come from its digitalisation drive, roll out of new mobile shops to enhance accessibility as well as the introduction of smart USD bundles, which stockbrokers EFE Securities see as an advantage to the group as it will also increase revenues in foreign currency.
The group introduced twelve additional mobile shops across the country which are fully equipped with high-speed Wifi and are solar powered in a bid to cater to remote areas.
According to EFE’s valuation on the group, revenue for the next half year will increase by 66,48 percent to a forecasted $96 billion. Econet recently released financials for the year to February 28, 2022, which showed the group’s resilience with top line growth of 50 percent to $84,27 billion despite a challenging business environment.
Profit after tax is seen closing the period at $27,58 billion while earnings before interest, taxes, depreciation and amortisation should be at $64,65 billion.
“This is backed by an increase in mobile shops which will improve access to Econet products and the novel 5G network which we anticipate to quickly spread across the country.
“We believe Econet remains the most compelling stock on the ZSE driven by its strong market leadership status and its continuous digitalisation,” said EFE in an earnings review update for the group.
The telecoms giant recently launched the first 5G network in Zimbabwe reaching throughputs of up to twenty times higher than 4G as the group seeks to enhance digitalisation.
However, the group said limited access to foreign currency is hampering its efforts to fully roll out network upgrades, as it prepares the country for digital opportunities coming from the growing digitalisation drive.
“We are limited in our ability to meet network upgrade requirements due to continuing issues related to accessing foreign currency to maintain the necessary capex investment to appropriately grow the network.
“This impacts our ability to roll out to previously underserved areas, such as the rural areas and/or new towns/townships,” said group chairman Dr James Myers in an update for the year February 28, 2022.
The group also rolled out network upgrades to improve customer carrying capacity and these upgrades included the deployment of ten greenfield base stations, and upgrading one hundred sites, across the country, from 3G to 4G, as part of efforts to increase the 4G network coverage.
During the year, Econet recorded a profit before tax of $21,87 billion after a 767 percent jump highly attributable to a decline in exchange losses.
The group’s total tax obligation amounted to $9,26 billion which was up 688 percent despite the increase in profit after tax which jumped 107 percent to $12,26 billion.
Group’s total assets amounted to $105,42 billion recording a 4,78 percent increase. Econet closed the period with a NAV of $72,89 billion while basic earnings per share for the period were $5,13.
According to their financials, volumes of data and voice rose by 58 percent and 19 percent respectively, mainly attributable to Covid lockdown that pushed people to conduct their office work and leisure events remotely.
Its subscriber base grew 6,75 percent to 9,25 million.
Source: https://www.herald.co.zw/econet-banks-on-digitalisation-drive/