Stability in the exchange rate has anticipated reducing foreign currency exchange losses to the biggest Telecoms company in Zimbabwe, Econet Wireless. When the foreign currency auction system ( system when the central bank regularly sells a given amount of foreign exchange through a bidding process and buys foreign exchange in the intervening periods at the previous auction-determined rate) returned last June, this has brought stability to the exchange rate.
According to a Zimbabwean financial services firm, IH Securities, Econet Wireless is likely to record 521 per cent growth in revenue to $ 21, 62 billion in 2021 from $3, 48 billion during the same period in 2020 and Turnover would further increase to $33.63 billion in 2022. Compiled estimations by IH securities revealed that Earning before interests, tax, depreciation and amortisation is seen rising to $ 10, 16 billion in 2021 and $15,21 billion in 2022.
IH securities in their earnings review, they said, “we anticipate stability in the exchange rate to drastically reduce foreign currency exchange losses though some element of exchange rate risk remains… Resultantly, we expect the group to gradually move from a loss position to a profit position and we anticipate the year 2021 to close at a loss position of $515 million, while 2022 is expected to register a profit after tax of $ 7, 35 billion”.
Further, the IH securities also said, “we foresee Econet continuing to lead this new era and keeping on unlocking interminable opportunities the revolution presents, reaping off the benefits that come with being a pioneer and with such diversification”.
In light with the efficient services and promotions that Econet wireless offers, one can argue that It is the giant in the telecommunication industry. Econet also indicated its focus would remain on coming up with innovative solutions at a time the world is wrestling with the effects of the pandemic. However, frequent tariff reviews predominately affected Econet’s good picture to its customers last year, but with the stable exchange rate Econet Wireless will not face “up ups and downs”.