{"id":78502,"date":"2023-06-01T20:20:39","date_gmt":"2023-06-01T18:20:39","guid":{"rendered":"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings"},"modified":"2023-06-01T23:48:05","modified_gmt":"2023-06-01T21:48:05","slug":"low-tariffs-chew-into-econet-earnings","status":"publish","type":"post","link":"https:\/\/www.africa-press.cc\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings","title":{"rendered":"Low tariffs chew into Econet earnings"},"content":{"rendered":"

Africa-Press – Zimbabwe. <\/strong><\/span>ECONET Wireless Zimbabwe (EWZ) has posted a near $17 billion loss for the year ended February 28, 2023, owing to a 317,14% increase in exchange losses during the period as the local currency tumbled.<\/p>\n

EWZ\u2019s loss is from a profit after tax of $39,62 billion over the comparative 2022 period.<\/p>\n

During the period, the Zimbabwe dollar sunk nearly 617%, against the greenback, to US$1:$889,13 as of February 28, 2023 from a 2022 comparative of US$1:$124,01.<\/p>\n

While the local currency took a battering, EWZ was unable to raise tariffs, its main source of revenue, in line with the depreciation leading to massive exchange losses for the firm.<\/p>\n

\u201cGroup revenue recorded a 20% rise driven by growth in voice and data usage of 19% and 58%, respectively,\u201d EWZ chairperson James Myers said in a statement for the financial results under review.<\/p>\n

\u201cThe regulator granted the sector three tariff adjustments of 61% each and a fourth adjustment of 50% during the year. The tariff adjustments were not adequate to offset the increase in inflation which closed at 230% in January 2023.\u201d<\/p>\n

The loss for the telecommunications company has left the firm in an illiquid position having only 93 cents to every dollar of debt as by February 28, 2023.<\/p>\n

Revenue rose to $339,16 billion during the period under review from a 2022 comparative of $282,15 billion.<\/p>\n

\u201cDespite the revenue increase on account of usage, the earnings before interest, taxation, depreciation, and amortisation (EBITDA) margin decreased from 52% to 40% for the year under review,\u201d Myers said.<\/p>\n

\u201cThe disparity between the revenue growth and EBITDA margin is reflective of the sub-economic tariff environment coupled with accelerated exchange rate depreciation. The local currency lost value by more than 85% during the year under review which had a negative impact on overall profitability.\u201d<\/p>\n

He continued: \u201cThe group incurred exchange losses of $77 billion which translated to 23% of revenue against a prior year comparative rate of 6% of revenue.\u201d<\/p>\n

The company was forced to invest US$66 million as part of its network modernisation programme that included network expansion and upgrades which is imperative for the firm to support business sustainability.<\/p>\n

Myers said this had in the past been hampered by several years of under investment, due to ongoing macro-economic challenges.<\/p>\n

The fall of the local currency also saw EWZ\u2019s costs and expenses rise by about 51% to $206,12 billion during the period under review from a 2022 comparative of $136,57 billion.<\/p>\n

Driving these overheads were increases in direct network and technology operating costs of 32,85% to $88,7 billion, staff costs of 50,43% to $37,29 billion and other expenses of 112,06% to $32,86 billion.<\/p>\n

However, the firm managed to report more than a 100% increase in total assets to $709,02 billion, from a 2022 comparative of $340,81 billion, owing to the revaluation of its property, plant and equipment in line with inflation.<\/p>\n

Myers said EWZ would continue to innovate to offer customers new digital experiences.<\/p>\n

\u201cWe have a strong platform to anchor our transition to a full-fledged digital services provider. Exploiting 4G and 5G network enabled opportunities will be key to keep abreast with emerging global trends and improve service delivery,\u201d he said.<\/p>\n

For More News And Analysis About Zimbabwe<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Zimbabwe. ECONET Wireless Zimbabwe (EWZ) has posted a near $17 billion loss for the year ended February 28, 2023, owing to a 317,14% increase in exchange losses during the period as the local currency tumbled. EWZ\u2019s loss is from a profit after tax of $39,62 billion over the comparative 2022 period. During the […]<\/p>\n","protected":false},"author":84,"featured_media":78501,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,6],"tags":[1493,2189,19],"class_list":{"0":"post-78502","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-economy","9":"tag-africa-press","10":"tag-africa-press-zimbabwe-2","11":"tag-zimbabwe"},"yoast_head":"\nLow tariffs chew into Econet earnings - zimbabwe<\/title>\n<meta name=\"description\" content=\"ECONET Wireless Zimbabwe (EWZ) has posted a near $17 billion loss for the year ended February 28, 2023, owing to a 317,1 ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Low tariffs chew into Econet earnings\" \/>\n<meta property=\"og:description\" content=\"ECONET Wireless Zimbabwe (EWZ) has posted a near $17 billion loss for the year ended February 28, 2023, owing to a 317,1 ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings\" \/>\n<meta property=\"og:site_name\" content=\"zimbabwe\" \/>\n<meta property=\"article:published_time\" content=\"2023-06-01T18:20:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-06-01T21:48:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/zimbabwe\/sites\/14\/2023\/06\/sm_1685639718.359215.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"745\" \/>\n\t<meta property=\"og:image:height\" content=\"474\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings\",\"url\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/low-tariffs-chew-into-econet-earnings\",\"name\":\"Low tariffs chew into Econet earnings - 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