DIVERSIFIED digital solutions group, Ecocash Holdings Zimbabwe Limited has suffered a ZWG148,7 million loss during migration to the newly introduced currency.
The Reserve Bank of Zimbabwe (RBZ) introduced the new ZWG currency on April 5 2024 as a lasting solution to the country's economic woes. The new unit has however ushered in both challenges and positives.
Presenting the group's financial performance for the half year ended August 31 2024, Ecocash Board Chairperson, Sherree Shereni said the transition from ZWL to ZWG exposed the group to losses.
"To comply with International Financial Reporting Standards, specifically IAS 29 'Financial Reporting in Hyperinflationary Economies' and IAS 21 'The Effects of Changes in Foreign Exchange Rates,' the Group had to restate prior year comparatives to April 5, 2024, using the inflation index.
"Consequently, the Group recognized monetary losses amounting to ZWG 148,7 million due to this process," she said.
The company said these losses arose from the restatement of opening ZWL balances according to IAS 29 guidelines before subsequent conversion to ZWG. The group recorded significant fair value gains amounting to ZWG 1.2 billion on the proceeds received from the scheme of reconstruction which were denominated in Zimbabwe Stock Exchange listed Econet shares.
During the period, Profit before tax was ZWG 1.66 billion, representing a significant growth from ZWG 144.6 million recorded in the same period the prior year.
After the half-year period, the Board of Directors of EcoCash Holdings Zimbabwe Limited declared a distribution out of the proceeds realized from the transfer of the non-banking business units to Econet Wireless Zimbabwe Limited.
The distribution payment comprised cash ZWG 910 billion (equivalent to 236,371,255 Econet Shares), and 236,371,255 distributed as Econet shares.
"The business will continue to drive innovation, by leveraging digital technologies which will increase operational efficiencies. We will grow our partnerships and collaborations to meet the ever-changing customer needs.
"We are dedicated to providing exceptional service to our customers through seamless and efficient banking channels," added Shereni.
