HARARE, May 30 (Reuters) - Zimbabwe’s largest mobile telephony company, Econet Wireless, reported a 16 percent drop in full-year net profit, pulled lower by growing financing costs.
Econet Wireless said net profit fell to $140 million in the year ended in February from $165.7 million a year earlier. Revenue grew 14 percent to $695 million.
The company concluded a $307 million syndicated loan during the year that increased interest charges and ate into the company’s profitability, Chief Executive Douglas Mboweni told reporters.
However, Mboweni said the company’s subscriber base grew 25 percent to 8 million after it invested $147 million to upgrade the network. The number of customers for Econet’s mobile money transfer service increased by nearly two thirds to 2.1 million.
Econet took control of a local bank last December to strengthen the mobile money service.
Mboweni said the government had renewed Econet’s licence, which expires in July. The government has set 20-year licence fees for the country’s three mobile telephony firms at $137.5 million. Econet paid the first instalment of $85 million.
Finance Minister Tendai Biti said this week that Zimbabwe’s economy may have shrunk by as much as 3 percent during the first quarter. But telecommunications are one of the fastest growing sectors in the country.
Econet shares closed up 3.7 percent at $0.72 cent, compared with a 0.39 percent rise by the benchmark Industrial Index . (Reporting by MacDonald Dzirutwe; editing by Tom Pfeiffer)