State owned Enterprise, Netone has recorded a $10.2 million profit, Chief Executive Officer, Mr Lazarus Muchenje has revealed.
Speaking during the company’s 2019 Integrated Report at the 3rd Annual General Meeting held today, Mr Muchenje said Netone was now on the rebound.
“Netone has in the past year regained market share after realizing a 25% increase of subscribers from 2,6 million to 3,3 million within the 2018 to 2019 financial year," he said.
He said the large MNO, closed off their financial calendar on high tangent, after realizing a 13% growth in revenue from $105.5 million recorded in 2017 to $119.1 million in 2018.
In his address, Mr Muchenje said, “The year commenced with a focus on narrowing the liquidity gap. l am pleased to report that the company has made strides in doing so with a major milestone being the reduction of negative working capital by 74% from $228.6 million to $59,4 million over the year ended 31 December 2018," he said.
He said his vision for 2019 would be to eliminate the SOE's liquidity gap by the end of the 2019 financial year and has already kick-started the mechanism that would enable fruition.
"The business also took a leap towards restoring value as evidenced by EBITDA of $38.2 million representing a margin of 32%, which showed a growth of 18% from margin of 14% in the prior year," he said.
He said the business swung to profitability, registering profit after tax of $10.2 million against prior year performance of a loss of $77.7 million.
"The buoyant performance was a result of revenue growth coupled with cost discipline to be revealed by the drop in overhead costs by 28% from $72.7 million in 2017 to $56.8 million in 2018,” he said.
In his remarks, the Netone Board Chairman, Mr James Mutizwa said, “As a board, we seek to create an enabling environment for the transformation of the business into a profitable tech-pioneering company.
“The growth in revenue was driven by 15% growth in subscribers coupled by reengineering of our services offerings," he said.
He said data contribution to revenue firmed from 26% to 37% indicative of shifting customer needs and preferences supported by our increasing social media engagement.
He added that Netone recorded EBITDA margin of 32% which is within the Industry trends.
Following his return to the state owned Enterprise, Muchenje has moved the former loss making entity to profitability by enforcing implementation of his strategy dubbed, "Back to Basics," with key focus areas being and quality distribution network.
With the newly elected board, Netone will sour higher and deliver sustainable profit growth and return to its shareholders and in turn contribute positively towards the society in which they operate.
The mobile industry is playing an increasingly important role in the social and economic development of the nation as mobile connectivity has become the main platform for innovation and driving force for greater inclusion, while the mobile ecosystem, including mobile network operators are contributing significantly to economic growth and job creation.
For many consumers in Zimbabwe, the mobile phone is not just a communication device but also the primary channel to get online, as well as a vital tool to access various life-enhancing services.
Access to mobile connectivity has enhanced access to many essential services, including education, health and utilities, while also enhancing business to deliver efficient and sustainable services through mobile-based platforms such as mobile money.