Zimbabwe: Econet Pays US $10 Million Dividend
Econet Wireless Zimbabwe has paid US$10 million to its shareholders after declaring a cumulative US$0.14 dividend for the year ended February 2010. The Zimbabwe Stock Exchange-quoted mobile phone operator recorded a US$113 million after tax profit during the financial period. The payout will provide relief to thousands of pensioners who are on pension funds invested in the company.
Econet has one of the largest numbers of shareholders on the local bourse. Finance director Kris Chirairo said: "Our shareholder profile is dominated by thousands of small shareholders and mutual funds that predominately invest for pension funds. "We are a public company, and we are owned by thousands of shareholders. Many people own shares through their pension funds that are invested in us."
Econet was the first company in Zimbabwe to pay out a US dollar dividend. "Our pension fund shareholders depend on us to provide liquidity and to make pension payments to their pensioners, many pensioners are really desperate. It is one of the reasons why we work hard to pay out dividends every six months.
"Most of the money invested on our stock exchange comes from pensions and insurance funds. Hyperinflation devastated pension funds, and they can only rebuild through investment in listed companies," said Chirairo. He said a lot of pension funds have had to dispose of investments to pay pensioners. "This is not sustainable, because it weakens the pension funds. They are forced to take such action because liquidity is really scarce. What they need are dividends from their investments."
Econet Wireless is also one of the largest payers of taxes to the Government. Chirairo also called on Government to implement more policies that speed up the recovery of large public listed companies.
"We cannot have just one or two public companies paying dividends. This has serious ramifications on the recovery of the pensions sector, and therefore on the welfare of the pensioners themselves.
"Pension funds can only get real liquidity if the productive sector recovers fully and people are properly remunerated," said Chirairo. During the financial year, the group's attributable earnings came to US$119,6 million and basic earnings per share of US66c.
The group's aggressive network expansion drive saw their total assets grow from US$182 million to US$397 million as property plant and equipment increased US$137.4 million to US$267,5 million. Equipment deposits surged from US$2.2 million to US$47.7 million.
Shareholders' funds grew by 86 percent to US$165.5 million despite the company's debt sitting at US$143.2 million. Econet, with a market share of 72 percent closed the year cash positive to the tune of US$13.9 million.