NetOne revenue up 9,48pc

NETONE says revenue in the five months to May 2016 grew 9,48 percent to $48,5 million compared to $44,3 million same period last year but profitability was impacted on by high overheads as well as legacy issues.

Giving oral evidence before a parly committee on ICT, NetOne chief finance officer Sibusisiwe Ndlovu said gross profit in the period rose to $34 million compared to $29 million last year.

“The growth in gross profit is also largely on the back of a reduction of cost of sales to $13,9 million from $15 million in the same period last year,” she said.

Mrs Ndlovu said overheads went up to $23 million from $20,6 million largely due to additional company’s units which were not being recorded in prior periods.

EBITDA declined to $8,5 million from $11,3 million while the loss position for the period widened to $2,1 million from a loss position of $1,1 million last year.

Acting chief executive officer Brian Mutandiro said as part of the ongoing company transformation, daily revenue since May is now averaging $300 000 from $250 000 at beginning of year.

He said the company will continue to focus on deriving value from existing capacity to increase revenue generation while targeting a profit position by year end.

“We are transforming the business from being network centric to customer centric and we are now seeing the fruits.

“We anticipate a second half recovery which will drive our revenues and hopefully by year end we will declare a dividend to the shareholder,” he said. NetOne is 100 percent owned by government.

Mr Mutandiro said the company had managed to gain market share in a sector dominated by Econet.

He said unlike Econet which has been overcharging customers, NetOne offers lower charges and this had led to growth in subscriber numbers.

Mr Mutandiro also added that the company has been recording growth in voice revenue opposed to other players.

Mr Mutandiro said while the transformation had seen the company streamlined into five strategic zones to enhance operational efficiency, legacy issues continue to weigh heavily on the business.

“Outstanding statutory payments among other unfulfilled contractual obligations have been detrimental to operations,” he said.

Netone acting board chair Sydney Nyanungo said the Board will only make a decision on current suspended management after completion of a forensic audit currently ongoing. He however said there are pockets of mismanagement by the Reward Kangai led management which could have affected business performance over the years. - Wires