By John Kachembere
HARARE – Zimbabwe’s largest mobile telecommunications company by subscriber base, Econet Wireless (Econet), will pay out a whopping $15 million to shareholders this year.
This comes after the mobile giant registered a $70,2 million profit in the full year to February 2015 under a very difficult economic environment characterised by an acute liquidity crunch, deflation, decline disposable incomes and low consumer demand.
The Zimbabwe Stock Exchange-listed blue-chip counter — with over 9,1 million subscribers — declared a $0,0031 dividend to take the full year dividend to $0,6131 after the company declared a $0,61 in the interim.
“The dividend will be payable to shareholders registered in the books of the company at the close of business on Friday, July 17, 2015. The share register of the company will be closed from Friday, July 17, 2015 to July 19, 2015, both dates inclusive,” said Econet.
The telecommunications giant, which has a market capitalisation of $409 million, said payment of the dividend will be effected on, or about July 24, 2015.
The payment of dividend by Econet — at a time when the majority of companies are either shutting down or scaling down operations due to the declining economic situation in the country — comes as good news to shareholders who received their first dividend in 2014 after three years.
Most companies operating in Zimbabwe have not been declaring dividends since dollarisation in 2009 in an attempt to sustain their business operations, as the liquidity crunch continues to bite.
In his 2015 National Budget presentation Finance minister Patrick Chinamasa said 4 610 companies had shut down in the past three years, resulting in over 55 000 job losses.
However, despite the gloomy economic environment other companies that recently declared dividends include British American Tobacco Zimbabwe, Old Mutual, Nicoz Diamond, Colcom, Innscor, OK Zimbabwe and Delta Corporation among others.
Market watchers claim that some companies may be forced by the major shareholder to declare dividends, while others may declare dividend as a way of managing perception because the public will rate highly a company that pays dividends in such an environment irrespective of their cash flows.
The latest development comes after Econet surpassed $1 billion in its contribution to the fiscus through taxes, fees and other levies since the dollarisation.
James Myers, Econet chairman said this contribution, and that of others in the sector, reflects the importance of the sector in contributing to economic development.
“Through supportive policies, the sector has immense potential to continue to contribute significantly to national development and to complement government’s efforts in economic development,” said Myers.
The telecommunications group, which grew connected subscribers by 4,7 percent to 9,1 million during the period under review from 8,7 million had its revenue reduced by less than one percent to $746,2 million from $752,7 million recorded in prior year despite experiencing growth overlay services and data. Daily News