State-owned enterprise NetOne has recorded a $10.2 Million profit revealed by the Chief Executive Officer, Mr. Lazarus Muchenje, in the NetOne 2019 Integrated Report presented during their 3rd Annual General Meeting held in the capital yesterday.
NetOne has in the past year regained market share after realizing a 25% increase of subscribers from 2,6 million to 3,3 million within 2018 to 2019 financial year. The large MNO, closed off their financial calendar on a high tangent, after realizing a 13% growth in revenue from $105,5 million recorded in 2017 to $119,1 million in 2018.
In his statement of address, Lazarus Muchenje said, “The year commenced with a focus on narrowing the liquidity gap, I am pleased to report that the company has made strides in doing so with a major milestone being the reduction of negative working capital by 74% from $228,6 million to $59,4 million over the year ended 31 December 2018.” Muchenje’s vision for 2019 is to eliminate the SOE’s liquidity gap by the end of the 2019 financial year and has already kick-started the mechanics that will enable fruition.
The Business also took a leap towards restoring value as evidenced by EBITDA of $38,2 million representing a margin of 32%, which showed a growth of 18% from a margin of 14% in the prior year. The business swung to profitability, registering profit after tax of $10,2 million against prior year performance of a loss of $77,7 million. The buoyant performance was a result of revenue growth coupled with cost discipline revealed by the drop in overhead costs by 28% from $72,7m in 2017 to $56,8m in 2018.
In his remarks the NetOne Board Chairman, Mr James Mutizwa said, “As a Board, we seek to create an enabling environment for the transformation of the business into a profitable tech-pioneering company. The growth in revenue was driven by 15% growth in subscribers coupled by reengineering of our services offerings.” Data contribution to revenue firmed from 26% to 37% indicative of shifting customer needs and preferences supported by our increasing social media engagement. NetOne recorded EBITDA margin of 32% which is within the industry trends.
Following his return to the state-owned enterprise, Muchenje has moved the former loss-making entity to profitability by enforcing implementation of his strategy dubbed, “Back to Basics”, with key focus areas being quality network in the market, quality contact center support, quality balance sheet, and quality distribution network. With the newly elected board, NetOne will sour higher and deliver sustainable profit growth and returns to its shareholders and in turn contribute positively towards the society in which they operate.