CASSAVA Smartech Zimbabwe Limited trading as EcoCash Holdings Zimbabwe says the group's revenue diversification strategy is paying off, as evidenced by the exponential revenue growth in the Insurtech and the Vaya Technologies business units.
The group's financials for the year ended February 28, 2021, shows that the overall revenue decline of 26 percent to $14,3 billion compared to $19,3 billion in the prior year was largely offset by the growth in the Insurtech business.
"Although group revenues closed the year at $14 billion compared to $19 billion in the prior year, due to the impact of regulatory changes and the Covid-19 pandemic, this was mitigated by a rigorous cost-cutting drive," group chairperson Mrs Sherree Shereni said in a statement of the financials.
She said the foreign exchange losses decreased by 45 percent, to close the year at $4,6 billion and these mainly relate to USD denominated debenture balances.
Mrs Shereni noted that as part of its revenue growth strategy, the Group will continue its focus on revenue diversification and innovation into the future.
She said during the year, the Insurtech business contribution to overall revenue increased to 15 percent from 9 percent in the financial year ended February 29, 2020, largely attributed to the growth of the short-term non-motor insurance business.
"The Vaya Technologies business also uplifted its performance contribution from 2 percent in the financial year 2020 to 7 percent in the 2021 financial year," she said.
EcoCash revenue contribution at 60 percent was lower than 75 percent in 2020, with the decline as a result of a revenue diversification strategy that saw growth in the Insurtech and VAYA Technologies business.
Mrs Shereni said Steward Bank's contribution remained stable and is expected to continue on the upward trend on the back of the system upgrade completed in April 2021.
Trading in the shares of Cassava Smartech Zimbabwe on the Zimbabwe Stock Exchange (ZSE) was suspended with effect from October 1, 2021, as the company had remained in default of publishing its audited financial statements for the year ended February 28, 2021.
However, following publication of the financials the ZSE has lifted the suspension in trading of Cassava shares effective today.
The company in a statement had attributed the delay to certain technical accounting matters that took time to be resolved.
According to the financials, EBITDA margin closed the year at 15 percent lower than 26 percent in 2020.
Mrs Shereni said the focus, therefore, remains on innovatively driving growth, consolidating the gains of the cost-cutting measures, and further reducing operating costs in FY22.
During the period under review, Cassava said through its partners, it supported a low cost, low input, climate-smart conservation farming approach called "Pfumvudza" in order to complement Government efforts towards a resurgence in agriculture and food security.
"The strength and agility of our business, combined with the professionalism, resilience, and innovative foresight of our teams, are expected to carry our business into the future, resplendent with digital opportunities.
"Our technology-driven platforms and processes offer significant advantages, and we continue to drive innovations and deploy them where the need is greatest.
"Consistent with that, the Group has continued to take advantage of this accelerated digital thrust to come up with new products and services that better respond to the evolving needs of our customers, guaranteeing a strong business that is transforming and is well placed to deliver sustainable growth into the future," Mrs Shereni said.
According to the Group's financials, the fintech business unit which is their largest operating unit constitutes about 80 percent of the total Group revenue.
Within the fintech business unit, 80 percent of the revenue comes from the mobile money business unit, EcoCash.
The goup has $2,7 billion of related party payables which relate to debentures which were assumed pursuant to the demerger of the group from Econet Wireless Zimbabwe Limited on November 1, 2018.
A total of 1 166 906 618 unsecured redeemable debentures with an annual compounding coupon rate of 5 percent were issued at a subscription price of 4,665 US cents per debenture and these are accounted for as a long-term related party payable.