Zimbabwe: Ecocash, Steward Drive Cassava Smartech Revenue

Listed financial technology firm Cassava Smartech's revenues for the four months to February 2020, jumped 318 percent to $4,6 billion from $1,1 billion in the prior comparable period.

"Despite the challenges in the obtaining operating environment, the group recorded revenue of $4,6 billion, compared to four months revenue for the period ended February 2019 of $1,1 billion," reported management.

Cassava recorded an increase in gross profit margin to 68 percent from 57 percent in 2019 and in the EBITDA margin to 29 percent, from 27 percent in the prior year.

According to the group, this increase occurred despite the pressure that the economic environment has continued to place on the business margins.

"To mitigate this, the business embarked on an elaborate cost optimisation drive to complement the revenue generation initiatives being implemented," said management.

Cassava said continued depreciation of the Zimbabwe dollar against the United States dollar -- during the period under review -- had a significant impact on the company's financial performance as it realised foreign exchange losses amounting to $2 billion.

And as at the reporting date, the group had net foreign liabilities amounting to US$42,8 million, of which US$30,5 million comprise of the group's 50 percent allocation of the overall liability in the debentures issued by Econet Wireless Zimbabwe Limited.

When the group was spun off telecommunications giant Econet Wireless Zimbabwe in 2018, it basically consisted of the mobile money (EcoCash) and banking (Steward Bank) segments.

The company has been consistently diversifying to include remittance service, an insurance technology company for cars, education, a ride hailing service and healthcare.

Although the mobile money and banking segments still account for the bulk of its revenue, management is pleased with the growth of the novel segments.

"Mobile money and banking businesses contributed 89 percent (FY19: 91 percent) of total revenue for the year.

"The decline in percentage contribution for the Fintech business segment reflects the positive effects of the group's revenue diversification strategy.

"The ongoing transformation of the business within the group remains a priority as we work on scaling up the new businesses and diversifying our revenue earnings for sustainability," said the group.

"We are excited about the growth of Agritech and Moovah revenues included in our Insurtech and Other segments respectively. The growth was largely driven by the digital on-demand agriculture platform catering for both small holder and large scale commercial farmers, as well as the non-motor business for the short term insurance business unit.

"Our Life business (EcoSure) maintained solid performance, anchored on innovative digital on-boarding platforms, as well as enhanced product mix to cater for the cross profile of the segments we service."