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ECONET WIRELESS HOLDNGS LIMITED

Half-Year Results
For The Period Ended 31 December, 2005 18 January, 2006

Financial Performance Historical Results Krison Chirairo- Finance Director

OPERATING ENVIRONMENT

Y-O-Y inflation rose from 132.70% in December 2004 to 585.8% by the end of December 2005. Foreign currency shortages and continued depreciation of the Zimbabwe dollar. Shortage of basic commodities, fuel and power cuts. Continued pressure on disposable income due to high inflation. Rising interest rates but with negative real returns.

Group Structure

Econet Wireless Holdings

100%

100%

84.3%

100%

35%

100%

Econet Wireless (Pvt) Ltd

Data Control (Ecoweb)

TPS

FDM (YourFone)

Gulfsat Maghreb

EWC Holdings (Pvt.) Ltd


23,4%

Note: Kingdom Financial Holdings Ltd results have not been included.

KINGDOM FINANCIAL
HOLDINGS LIMITED

KEY PERFORMANCE INDICATORS


Indicator June 2005 Dec 2005 Dec 2004 change

Subscribers Turnover (Z$m)

258,268 678,995

412,197 1,425,054

244,435 236,565

69% 502%

EBITDA Margin
Overheads as % of turnover PBIT margin Attributable earnings as % of turnover Basic EPS (Z$)

54%
32% 51% 47% 2,097.09

56%
29% 54% 42% 4,058.25 770,347 146,904 0%

53%
34% 53% 43% 658.97 132,015 65,504 0%

6%
15% 2% (2%) 516% 484% 124% 0%

Net cash generated from operations(Z$m) 306,237 Capex Debt Equity Ratio 136,964 0%

INCOME STATEMENT
ZW$ Millions June 2005 Dec - 2005 2004 change

Revenue Cost of sales & operating expenses EBITDA Depreciation and amortisation Net finance income

678,995 (309,739) 369,256 (8,844) 45,591

1,425,054 (760,001) 797,264 (30,250) 101,808

236,565 (113,218) 124,490 (4,287) 17,332

502% 571% 540% 606% 487%

Profit before taxation Taxation Profit after taxation

467,218 (149,547) 317,671

869,529 (263,876) 605,653

146,903 (45,672) 101,231

492% 478% 498%

Minority interest

(55)

(706)

(70)

909%

Attributable earnings

317,616

604,947

101,161

498%

REVENUE GROWTH

Revenue has grown by 502%. Network upgrade resulted in release of over 156,000 new Libertie lines. Increased usage across all packages. Tariff increase awarded in October 2005 though below July 2005 tariff.

1,600 1,400 1,200 1,000 800 600 400 200 200 0 237 679

1,425

2004 Jun

2004 Dec

2005 Jun

2005 Dec

Revenue

REVENUE CONTRIBUTION
By Company

Dec - 2005
$1,4 trillion
FDM 1% TPS 1%
FDM 4%

Dec- 2004
$237 billion

Data Control 3%

Data Control 3%

TPS 1%

EWZ 94%

EWZ 92%

REVENUE ANALYSIS

Dec-2005
$1.4 trillion
International
10%

Dec - 2004
$237 billion

International
9%

Other
8%
9%

8% Other

Interconnection

Interconnection

20%

Local airtime

61%

73%

Local airtime

EBITDA GROWTH
900 800 52% 700 600 34% 52% 50%
797

53%

54%

56%

60%

50%

40%

Billions

500 30% 400 300 369 200 10% 100 2 0 2002 Jun 2003 Jun 2003 Dec 13 31 100 2004 Jun 2004 Dec 2005 Jun 2005 Dec 124 0% 20%

EBIDTA

Margin

PROFIT GROWTH
800
491%
869

600

Billions

605

400

499%
467 318 147

200
104 76 101

2004 Jun

2004 Dec

2005 Jun

2005 Dec

PBT

PAT

BALANCE SHEET
ZW$ Millions Jun-2005 Dec - 2005 Dec - 2004 change

TOTAL ASSETS Non current assets Current assets

577,422 267,706 309,716

1,716,081 476,391 1,239,690 1,716,081 674,270 1,037,431 4,380

351,495 191,775 159,720 351,495 201,574 141,714 8,207

388% 148% 676% 388% 235% 632% (47%)

TOTAL EQUITY AND LIABILITIES 577,422 Total Equity Current Liabilities Non Current Liabilities 333,642 239,377 4,403

CASHFLOW STATEMENT

ZW$ Millions

Jun 2005

Dec 2005

Dec 2004

Change

Cash flow from operating activities Net finance income Taxation paid Dividend paid Net cash flow from operating activities
Cash flow from investing activities Cash flow from financing activities

381,604 45,591 (73,497) (47,461) 306,237


(136,964) (33,267)

904,242 133,172 579% 101,808 17,332 487% (163,602) (5,729) 2,999% (72,101) (13,703) 426% 770,347 131,072 488%
111% 625%

(138,033) (65,504) (192,217) (26,497) 440,097

Net increase in cash and cash equivalent 136,006

39,071 1,026%

Cash and cash equivalent at year beginning


Cash and cash equivalent at period end

43,347
179,353

179,353
619,450

43,347
82,419

314%
652%

OPERATIONAL PERFORMANCE
Douglas Mboweni

CEO Econet Wireless (Pvt) Ltd

OPERATIONAL PRIORITIES

Network Hardware & Software Upgrades and expansion

Cost efficiency + Staff productivity & retention

Key Operational Priorities Jan06-Jun06

Innovative products based on Current and new infrastructure

Grow an active & viable subscriber base and sustain economic Tariffs in real terms

NETWORK DEVELOPMENT
Upgrade of critical switch hardware and software. Continue with implementation and commissioning of Base stations Implementation of GSM 1800 Implementation of 2.5G & 3G functionality Key focus is on Network quality and subscriber uptake.

RADIO NETWORK

BASE STATION CONTROLLERS

THREE

SWITCHES & VAS PLAT.

BASE STATION CONTROLLERS

RADIO NETWORK

Some key developments: (July Dec 2005)


36 New base stations deployed throughout the country with 14 new areas introduced Software upgrades were done such that the network is now operating on Ericssons new Software Release 10. A new SMSC was commissioned with a capacity of over 50 messages per second A complete Radio Network Improvement (RNI) was performed resulting in a grade of service (GOS) of less that 5% and a dropped calls rate of less than 2% across the network.

NETWORK COVERAGE
New geographical coverage: Zvishavane, Shurugwi, Mt Darwin, Mvurwi, Macheke, Banket, Rutenga, Mvuma, Shangani, & Mazowe, Chirundu, Kariba Harbour, Nyazura, & Esigodini Towers and shelters have been erected in nearly all small towns, holiday resorts, growth points, business centers and border posts

Tower steel material in stores for more towers yet to be constructed


Site acquisition and preparation work continues

MARKET SHARES
All Networks Mobile Networks

Tel*One 32%

Econet 38%

Telecel 19%

Telecel 13%

Net*One 25%
Net*One 17%

Econet 56%

Source of Competition Figures:

Market Intelligence

THE ECONET PRODUCTS

1
2

3
4 5

Key Marketing Innovation: July Dec 2005


1. Introduction of Electronic Value Distribution (EVD)
2. Over 200 Outlets countrywide

Introduction of airtime sales and bill payment in all Kingdom Bank branches

3.

Continued to promote electronic top-up of airtime via the E-tranzact platform

4.

Distribution of airtime through the Zimpost branch


network which has over 350 outlets

5.

Launched Airtime transfer via SMS

All initiatives designed to offer customer


convenience and cost savings

Payphones.
1,000 2,000 3,000 4,000 5,000 6,000 -

PAYPHONES

Payphone Growth

Month

Ja n05 Fe b05 M ar -0 5 Ap r05 M ay -0 5 Ju n05 Ju l-0 5 Au g05 Se p05 O ct -0 5 N ov -0 5 D ec -0 5

Additons

Cumulative

SUBSCRIBER GROWTH Subscribers increased by 69% with an addition of 167,762 new lines since 31 December 2004. Total subscribers now at 412,197 (244,435 at 31 Dec 2004) Re-launch of Libertie added over 156,000 new lines. The business focus will be on new Libertie in the second half.
450000 400000 350000 300000
35 2, 37 6 11 4, 25 2 73 ,9 55 17 0, 48 0 19 3, 80 9

69%

250000 200000 150000 100000 50000 0


38 ,9 15

2003 Dec

2004 Dec

2005 Jun

64 ,4 59

2005 Dec

Contract

Prepaid

59 ,8 21

Average MOU per Subscriber

200 180 160 140 120 100 80 60 40 20 0


89 94 98 90 120 124 188 169 169 166 189

161

2003 Dec

2004 Dec

2004 Jun

2004 Dec

2005 Jun

2005 Dec

Outgoing

Incoming

TOTAL USAGE IN MINUTES

70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Mar05 Apr05 May- Jun05 05 Jul05 Aug- Sep05 05 Oct05 Nov- Dec05 05

Outgoing Minutes

Incoming Minutes

INCOMING MINUTES
70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Mar05 Apr05 May- Jun05 05 Jul05 Aug- Sep05 05 Oct05 Nov- Dec05 05

Total Incoming National

Econet to Econet International

TARIFFS Moved to Cost based tariff structure (COSITU) in October 2005.

COSITU Benefits Cost Based Model captures all cost elements and allows the business to charge economic tariffs Easier to establish rapport with the Regulator, with the use of COSITU.
The Future Agreed with Regulator to review tariffs every quarter Operators are allowed to review tariffs whenever there is a significant shift in the cost structure Operators required to be cost-efficient to avoid over-pricing

STAFF PRODUCTIVITY AND RETENTION 1. The company has moved to a Performance bonus based on company profitability and cost efficiency. This replaces the traditional thirteenth cheque which had no bearing on profitability. 2. The company has a staff training and development programme named Grow and Glow. Retention of skilled staff is a key business priority. 3. The business continues to deal with the HIV/AIDS challenge by promoting an employee wellness programme Live to Love aimed at: a) Awareness b) Prevention and c) Treatment.

1. Econet launched Econet in the Community programme in September 2004 with the target being the less privileged in the society. A number of organisations such as Jairos Jiri continue benefited from the programme.

2. Econet supports the education and upkeep of more than 25,000 orphans through Capernaum Trust.
3. The Company has launched the Joshua Nkomo Scholarship Fund which will take care of University tuition fees and stipend for the top 5 students from each of the 10 provinces in Zimbabwe.

THANK YOU

Questions & Answers