EcoCash Holdings Reviewed Condensed Consolidated Financial Statements for the half year ended 31 August 2021
Chairperson’s statement
INTRODUCTION
The performance of the business continues to be underpinned by our digital transformation journey, leading to the development of innovative products that provide unparalleled convenience to our customers. Financial inclusion remains a key strategic focus in all our product development in line with our vision of a digitally connected future that leaves no Zimbabwean behind. We have made strides in digital transformation in the period under review, with upgrades of key systems, which has positioned the Group for growth into the future.
The half-year under review was characterized by continued imposition of lockdown measures due to the resurgence of the Covid 19 pandemic, which resulted in restrictions on the movement of persons and subdued business activity. The period also witnessed a decline in the month-on-month inflation and relative economic stability, which presented the business with an opportunity to recover.
BUSINESS OVERVIEW
As we celebrate the 10th anniversary of the mobile money business, we reflect on the key role that the business has played in driving the financial inclusion agenda in Zimbabwe. EcoCash continued a steady growth trajectory with transaction values and wallet funding on the upward trend compared to the same period last year at 25% and 54%, respectively.
The Steward Bank lending strategy yielded positive results as the 127% growth in the loan book from February 2021 spurred the bank’s 293% growth in interest income, compared to the same period last year. The completion of the Core Banking System upgrade, in line with the acceleration of our digitization focus, has resulted in improved customer experience and has created capacity for the development of innovative products in the future.
In line with the Group’s focus on financial inclusion, the Insurtech businesses implemented various initiatives to reach previously uninsured communities. In line with our revenue diversification strategy, the Insurtech business revenue contribution grew from 14% in the same period last year to 19% on the back of the growing strength of our short-term insurance corporate book. Econet Life was awarded for being the most innovative insurance company at the 2021 Insurance Company awards. Innovation remains a key pillar in achieving our vision.
Vaya Technologies continues to grow its operations on the back of growth in the agricultural sector. The growth in the Healthtech revenue was spurred by our response to the demand for health services during the period due to the Covid-19 pandemic. We will continue to create the capacity to be able to respond to health needs.
FINANCIAL PERFORMANCE
The Group’s revenues increased by 36% compared to the same period last year, driven largely by an increase in transactional volumes for the Fintech business units. The Fintech business remains the largest contributor to revenue, constituting 80% of total revenue. Management continues to focus on revenue diversification as a strategy for revenue growth.
The loss before tax reduced to ZW$27.6 million compared to a loss before tax of ZW$1.8 billion in the prior period on the back of revenue growth, reduced exchange losses, and effective cost reduction initiatives that started during the prior year. Management remains focused on leveraging technology to improve operational efficiencies.
CORPORATE SOCIAL RESPONSIBILITY
The Group continued to actively support efforts by the Government to fight the pandemic through the provision of affordable COVID-19 testing services and sanitization services.
The Group, through its partnership with Higher Life Foundation, continued with key interventions that focused on education, rural transformation, global health, and sustainable livelihoods.
Within education, we continued providing learning opportunities to academically gifted, orphaned, and vulnerable children in Zimbabwe through scholarships from Early Childhood Development (“ECD”) to tertiary level.
Our initiatives on sustainable livelihoods continue to create opportunities for communities to venture into climate-smart agriculture through a concept termed “Pfumvudza”, which is also a Government programme aimed at ensuring that climate shocks are mitigated in agricultural output.
OUTLOOK
The Group is anchored on a sound capital and liquidity position, allowing it to continue to support its customers. It will continue with its digital transformation journey and is optimistic about the future ahead. As a diversified digital solutions group, we are investing in artificial intelligence, machine learning, and cloud-based services to proactively develop products that will meet our customer needs and improve the customer experience.
APPRECIATION
I would like to extend my appreciation to our shareholders, customers, regulators, Government, and business partners for their continued support. Our employees have continued to be innovative in the face of change and I would like to express my gratitude on behalf of the Board for their dedication to meeting the needs of our customers and strengthening our market position.
On behalf of the Board
Sherree Shereni
Board Chairperson
16 December 2021
