INTRODUCTION
The financial year 2022 was yet another turbulent year for the global and local economy on account of the Covid-19 pandemic. Though the severity of the pandemic was curtailed through widespread vaccinations, lockdowns, decongestion of offices, and other mitigatory measures, many of our staff, customers, and families were and continue to be impacted. Our business has had to navigate an increasingly difficult local operating environment for the greater part of the year with the depreciation of the local currency, rising inflation, and the re-emergence of the parallel market all creating a cocktail of challenges that are impacting almost every business in the country.
The resilience of our strategy, the commitment of our staff, the support of our stakeholders, and the relevance of our products and services has allowed us to navigate these operational difficulties. We remain committed to providing digital solutions to the evolving needs of our diverse client base by bringing them the convenience they need.
REGULATORY ENVIRONMENT
The Board has oversight over the regulatory compliance of the Group. The Group continued to comply with all regulatory pronouncements issued throughout the financial year. The growth of our Mobile Money business has been severely constrained due to regulated transaction limits, regulated tariffs, and the continued suspension of some of our revenue-generating services.
OPERATIONS REVIEW
Product innovation remained a key priority and has allowed us to provide relevant digital solutions that address consumer needs. With the continued support of our stakeholders, we have launched several exciting products and solutions that include the automation of merchant settlements, self-care portal for EcoCash reset pin-reset, MARS laboratory tests for Covid-19, Vaya Services Fuel Monitoring, Vaya Smart Security, and improved KaShagi digital loans.
To drive our digital banking model, Steward Bank successfully deployed a new core banking system with enhanced features. Leveraging on the upgrade, our Square banking App was also upgraded as well as the online banking offer. The Bank also complied with the minimum capital requirement set by the regulator within the set timeline of 31 December 2021.
Our drive towards a superior customer experience and service culture saw us continuously invest in products and services designed to bring convenience, especially during the Covid-19 lockdowns and restrictions. Following these initiatives, our call centres saw a reduction in call-in traffic by over 90%.
FINANCIAL PERFORMANCE
The Group’s financial results and the commentary have been prepared on an inflation-adjusted basis as required by IAS 29 “Financial Reporting in Hyperinflationary Economies”. Financial statements prepared under the historical cost convention have only been presented as supplementary information. The Directors would like to advise users to exercise caution on their use of these audited abridged consolidated financial statements, due to the material and pervasive impact of the technical difficulties of reporting under International Accounting Standard (IAS) 29.
Despite the challenges prevalent in FY2022, EcoCash Holdings Zimbabwe Limited delivered a commendable performance once again, with the Group’s revenue closing at ZWL29.9bn, 26% above the financial year 2021 performance of ZWL23.8 billion. The Fintech businesses remained the largest contributor to revenue, at 80% (2021: 77%). The contribution by the Insurtech business was at 14%, a slight decrease from the prior year’s 15%, and Vaya Technologies closed the year at a contribution of 6%. Management will continue to adapt business units’ operating models to both grow and diversify sources of revenue.
The Group’s EBITDA margin improved from 15% to 18% because of the relentless focus on cost optimization. The Group will remain focused on revenue growth, operational efficiencies, and optimization of the balance sheet. During the year, 22% of the debenture holders exercised their option to redeem their debentures early in line with our balance sheet optimization strategy. Foreign currency exchange losses reduced from ZW$6.3 billion in 2021 to ZW$1.2 billion during the current year.
DIVIDEND DECLARATION
The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.
CORPORATE SOCIAL INVESTMENT CAPITAL
Investing in the communities in which we operate and promoting social transformation remains of paramount importance to us. The Group’s vision of unlocking digital possibilities for community benefit was executed through the provision of access to world-class education materials through Higher Life Foundation in the past year. Consistent with our aim to provide support for essential health services, we invested in the provision of critical basic and large-scale, high-tech equipment, personal protective equipment, and training of healthcare workers through MARS and Higher Life Foundation.
OUTLOOK
The change in our name from Cassava Smartech to EcoCash Holdings reinforces our desire to use the Ecocash brand, our flagship brand as our primary identity.
The Group is optimistic about the future and will drive financial inclusion by leveraging the power of our digital platforms and partnerships. Our diversified group will continue to produce cutting-edge inclusive solutions and will expand our fintech solutions to agriculture, education, healthcare, and financial services, through the adoption of artificial intelligence (AI), big data, blockchain, and machine learning.
APPRECIATION
On behalf of the Board, I wish to express my sincere gratitude and appreciation to our customers, business partners, and our valued shareholders for their confidence in us, which will be deservedly rewarded over time. I would also like to extend my gratitude to the EcoCash Holdings Board of Directors, employees, management, and executive team for their passion, commitment, and dedication to achieving a high performance culture and ensuring EcoCash Holdings thrives and continues to grow.
On behalf of the Board
Sherree Shereni
Board Chairperson
7 July 2022
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