By Tawanda Musarurwa

HARARE – Zimbabwe's larg-est media group, Zimpapers (1980) Ltd has reported an after tax of $2,7 million in the full-year to December 31, 2015 as its newspa-per operation turned on an improved performance.

The rise to profitability was a significant upturn in fortunes from a loss of $11, 4 million posted in FY2014.

The group's revenue was essentially flat at $40 million compared to $41, 6 million recorded in the prior compa-rable period.

But a strategy to reduce dis-tribution and administrative expenses saw the firm return

to the black.Administrative costs declined to $24,2 million from $30,6

million, while selling and dis-tribution costs was reduced to $4,1 million from $7,8 million prior year. Other income was up to $2,2 mil-lion from $1,8 million in the prior year comparable year.

In respect of its various operations, the group's newspaper division recorded an operating profit of $3,6 million before finance costs compared to an operating loss of $60 000 in FY2014, on the back of effective cost management.

The commercial printing division also registered an upturn, posting a 71 per-cent jump in revenue to $3,6 million from $2,1 million last year.

News Update as @ 1530 hours, Thursday 31 March 2016

Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

Zimpapers Ltd posts $2,7m profit

Group CEO Mr Pikirayi Deketeke

According to management, the division's growth was driven by improved capacity util isation following refur-bishment of the printing press and retooling of the downstream operations.

The broadcasting division's

revenue rose 10 percent to $3, 4 million from $3,1 million previously, as the company implemented new revenue streams.

Broadcasting recorded an operating profit before interest and tax of $200 000

compared to a loss of $1, 1 million in the prior year.

Basic earnings per share was a positive 0,48 cents up from a negative 2,05 cents prior year.●

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BancABC Zim posts $2,4m profitBH24 Reporter

HARARE -Africa Banking Corpo-ration of Zimbabwe (BancABC) recorded a profit after-tax of $2,38 million for the year ended December 31, 2015 as the bank took advantage of lower impair-ment charges during the period.

The profit outcome was a signif-icant upturn from a $1,5 million loss in the prior year. BancABC’s operating income rose to $47,9 million from $38,9 million in FY2014.

Net interest income for the period under review of $95,8 million was lower than $102,1 million in FY2014, attributable to marginal

decline in loans and advances as well as currency depreciation. Non-interest income was up 10,5 percent to $76,6 million. Accord-ing to management, the non-in-terest income was mainly driven by strong foreign exchange trad-ing revenue, and a rise in fee and commission revenues resulting from retail asset growth. Chair-man Mr Alvord Mabhena said they expect fees and commissions income to increase going forward in view of “improved delivery channels.”

The impairment charge of $11,4 million in 2015 was substantially lower than the $72,2 million in 2014, mainly due to significant asset recoveries in Zimbabwe

and Tanzania. Meanwhile, the chairman said the Zimbabwe Asset Management Corpora-tion (ZAMCO) contributed to the bank’s lower loan impair-ment charges. Loan impairment charges were $7,1 million, down 76 percent from $30 million in the prior comparable period.

“Initiatives from Government through the ZAMCO have assisted in improving the perennial prob-lem of high non-performing loans not only across the sector but for the bank as well by taking over some of the debt creating room for productive credit growth,’ said Mr Mabhena. The bank however plans to maintain a “cautious approach” to lending.●

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BH24 Reporter

HARARE -Recently listed micro-finance institution GetBucks Zimbabwe saw a decline in profitability to $1,9 million in the six-months to December 31, from $2,1 million in the prior comparable period.

GetBucks, which is among Zimbabwe’s first deposit-tak-ing microfinance institutions, was weighed down by a rise in operating expenses during the period under review.

“Operating expenses grew from $1,1 million to $2,4

million over the same period due to necessary staff increases and increased information technology sup-port and development for the deposit-taking license,” said the company in a statement accompanying the results.

In terms of a break-down

of the operating expenses, the significant shifts were notable in management fees, which jumped 200 percent to $900 000, and employment costs, which rose 69,33 per-cent to $519 000.

Interest income for the period stood at $3,3 million,

up 26 percent from $2,8 mil-lion from the prior compara-ble period.

Fee and commission income also went up by 34 percent to $2,4 million from $1,8 million.

During the period, GetBucks’ total assets grew by 15 percent from $14 million to $15,8 million with over 80 percent of the assets being interest bearing.

The board has declared an interim dividend of $500 000 being 0,0457 cents per share.●

5 NEws

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GetBucks earnings decline

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BH24

TAA:DI251386-Y22

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By Tawanda Musarurwa

HARARE– Government says it appreciates the importance of the World Bank’s Ease of Doing Business Rankings and is expediting reforms to improve the country’s global standing.

The Ease of Doing Business index assesses 182 countries’ macro-economic environment, focusing on indicators includ-ing: ‘starting a business’, ‘dealing with construction permits’, ‘getting electric-ity’, ‘trading across bor-ders’, ‘paying taxes’, ‘getting credit’, ‘registering property’, ‘protecting minority inves-tors’, enforcing contracts’ and ‘resolving insolvency’.

The Minister of Policy Co-or-dination and Promotion of Socio-Economic Ventures in the President’s Office Ambas-sador Simon Khaya Moyo said it is important for the country to improve its ranking on the index as it contributes significantly to international

investors’ perceptions.

“This ranking is very criti-cal in that it is on the basis of the same that potential foreign investor’s form an opinion about how conducive or otherwise is the country’s investment climate,” he said.

He added that some progress had been made in respect of the country’s latest ranking, but more needed to be done.

“We used to get ranking above 170 from 182 coun-tries. However when we embarked on reforming the ease of doing business, we immediately saw our ranking improving to 155 out of 182 countries.

“With the sustained efforts that we are making in reforming the same, we are confident that we will see a further improvement in our rating in the next assess-ment.

“Government is quite aware

that the competitiveness of our companies has been negatively affected by the high overhead costs relating to utilities, transport, energy, labour, amongst others. A taskforce was set up with a view to reviewing these costs so that the same can become comparable to those obtaining in other regional countries. We have already witnessed a reduction for instance, in water tariffs,” said the minister.

Ambassador Khaya Moyo also urged private firms to take advantage of growing global networks.

“Production networks are now globally determined. There-fore it is incumbent upon any enterprises who are endeav-oring to produce to prime their activities in tandem with this phenomenon. To do otherwise would be a futile exercise because one would not be able to compete on the global market.”●

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Govt backs world Bank doing business rankings

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BH24 Reporter

HARARE – Hospitality group Rainbow tourism Group recorded a 2 percent growth in occupancy to 50 per-cent during the year ended December 31 while revenue declined by a slight 0,03 per-cent to $30,6 million.

Revenue was largely affected by the 15 percent value added tax imposed on for-eign revenues in January this year.

According to RTG chairman John Chikura the value added tax had diluted foreign reve-nues by $600 000.

“Had this new tax not been introduced, the group would have enjoyed double digit growth of 12 percent on a like on like basis.

“Despite this foreign reve-nues grew 6 percent to $9,28 million from $8,75 million recorded during the corre-sponding period last year,”

he said.

Mr Chikura said that the growth in foreign revenue was positive for the business as it minimises shocks of the depressed local market.

The group recorded a loss of $29 304. EBITDA grew by 300 percent from $0,9 million in 2014 to $3,6 mil-lion in 2015 while operating profit was up at $1 million compared to a loss of $800 000 in 2014.

This performance was attrib-uted to comprehensive and stern cost reduction meas-ures which commenced in 2013 as part of the Group's

turnaround strategy.

The Group injected $5,5 million towards CAPEX for product upgrades and refur-bishment in the past three years.

This was achieved through internal cash flows. In keep-ing with its bid to ensure customer satisfaction, RTG said it will continue with the refurbishment of the Kadoma Hotel and Conference Centre with focus being on soft room furnishings, while at Victoria Falls Rainbow Hotel bathrooms and furniture will be replaced to refresh the product.

Cost management will remain key to the delivery of value, through the removal of inef-ficiencies from the system.

The Group restructured the $13 640 349 loan facilities with NSSA. The new facility has a seven year tenor at an interest rate of 6 percent per annum.●

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RTG's FY2015 revenues decline

BH2412

BH2413

HARARE -The mainstream industr ia l index c losed March on a higher note, r is-ing 0.44 to c lose at 97.61.

Cigarette giant BAT led the gainers with a $0,0480 gain to trade at $10,7980, whi le g iant insurer Old Mutual was up $0,0312 to trade at $2,2025 and Padenga added $0,0110 to c lose at $0,0710.

Other gains were seen in Inn-scor, which rose $0,0023 to $0,1873 and giant te lecoms Econet moved up $0,0013 to sett le at $0,2443.

Cement giant PPC was the only counter which traded in

the negat ive terr i tory after los ing $0,0025 to c lose at $0,6975.

The mining index was f lat at 19.53 as Bindura, Fal-gold, Hwange and RioZim maintained previous pr ice

levels at $0,0100, $0,0050, $0,0300 and $0,1040 respec-t ively.- BH24 Reporter ●

ZsE14

Industrials close March on a high

MovERs CHANGE TodAY PRICE UsC sHAKERs CHANGE TodAY PRICE UsC

Name Change% PriCe today PPC -0.25 69.75

PADENGA 18.33 7.10

STARAFRICA 5.26 1.00

OLD MuTuAL 1.43 220.25

INNSCOR 1.24 18.73

ECONET 0.53 24.43

ZIMPLOW 0.50 2.00

PEARL 0.45 2.21

BAT 0.44 1,079.80

BARCLAYS 0.35 2.80MEIKLES 0.28 7.08

SEEDCO 0.03 64.00

INdEx PREvIoUs TodAY MovE CHANGE

INDuSTRIAL 97.17 97.61 +0.44 Points +0.45%

MINING 19.53 19.53 +0.00 POINTS +0.00%

15 ZsE TABlEs

ZsE

INdICEs

stock Exchange

Previous

today

16 dIARY oF EvENTs

The black arrow indicate level of load shedding across the country.

PowER GENERATIoN sTATs

Gen Station

31 March 2016

Energy

(Megawatts)

Hwange 469 MW

Kariba 468 MW

Harare 30 MW

Munyati 17 MW

Bulawayo 21 MW

Imports 0 - 400 MW

Total 1287 Mw

THE BH24 dIARY

JoHANNEsBURG - South Africa's hit a near 4-month high against the dollar on Thursday as the country's top court said President Jacob Zuma failed to respect

the constitution when he ignored the instructions of an anti-graft watchdog to repay some of the $16 million spent on his private home.

At 0900 GMT, the rand traded at 14,8040 per dollar, 0,94 percent firmer from Wednes-day's New York and its strongest level since Dec. 9- Reuters●

REGIoNAl NEws 17

Rand hits a near 4-month high against the dollar

JoHANNEsBURG - Growth in private sector credit demand in South Africa quickened to 9,02 percent year-on-year in Febru-ary from 8,54 percent in January, central bank data showed on Thursday.

Expansion in the broadly defined M3 measure of money supply was at 10,25 percent year-on-year in February, largely unchanged from 10,28 percent in January - Reu-ters●

south Africa's February credit

growth quickens to 9,02 pct y/y

Euro-area inflation was negative for a second month in March, in data released on the eve of the European Central Bank’s first day of expanded debt purchasing to fight deflation.

The consumer price index in the 19-nation bloc fell 0,1 percent from a year earlier after a 0,2 percent drop in February, according to data published Thursday.

That matches the median prediction in a Bloomberg survey of economists. Core inflation, which strips out volatile elements such as food and energy, was at 1 percent, up from 0,8 percent in the prior month.

“We have seen energy putting a lot of downward pressure on headline infla-tion,” said Marco Valli, chief euro-area economist at uniCredit Bank AG in Milan. “Monetary policy cannot do it all, but in the short term it’s basically the only game in town. That’s how it is now, and probably how it will be if a further shock hits the economy in next months.”

The ECB will on Friday beef up monthly bond purchases to 80 bill ion euros ($91 bil-lion) from 60 bill ion euros, after President Mario Draghi this month unveiled a raft of new measures to spur price growth, including lower-ing its deposit interest rate deeper into negative terri-tory. Inflation hasn’t come near the ECB’s goal of just under 2 percent since 2013, and a moderate economic recovery has been insuffi-cient to counteract falling oil

costs.

An index of executive and consumer confidence in the euro area slumped for a third month to its lowest level in more than a year in March, the European Commission in Brussels said on Wednes-day. Data on Friday will probably show the region’s unemployment rate remained unchanged at 10,3 percent that month, according to economists in a Bloomberg survey.

The euro-wide number follows low readings in the region’s biggest economies. In Germany, the European union-harmonised inflation rate rose to 0,1 percent from minus 0,2 percent, according to data released Wednesday. The rate in France was minus 0,1 percent, while Spanish prices fell 1 percent.

Central bankers around the world been boosting mone-tary stimulus measures or slowing the pace of tighten-ing in response to volatil ity in financial markets. Draghi’s asset purchase plan is driv-ing down government bond yields as investors face even higher demand, with supply unable to keep up.

“One of the aims of neg-ative interest rates was to push investors further down the risk spectrum into other assets and boost their prices,” Stewart Robertson, an economist at Aviva Inves-tors, said in a Bloomberg TV interview with Manus Cranny and Anna Edwards. “That hasn’t really happened.” – Bloomberg●

INTERNATIoNAl NEws 18

Euro-area prices drop for second month before ECB beefs up QE

By Nigel Gambanga

…just removing WhatsApp bundles won’t work (sub-scribers would stil l use IM) so banning OTT services like WhatsApp might just be what these operators will consider.

If it is presented as an alter-native from the operators, the Government, through the Ministry of Finance (which is receiving lower taxes from the operators) would gladly sign off on that. This would be a decision based on revenue and preserving an industry that has contributed significantly to state coffers. Besides, we wouldn’t be the first country to do this.

That was something we published in September last year. We were rightfully slammed for mounting noth-ing more than a speculative argument with a sensational suggestion. Nobody in their right minds would want to ban WhatsApp.

We were wrong. It’s not the Government that wants WhatsApp banned, it ’s actu-ally the mobile operators and the issue is less about reduced taxes and more about struggling with inno-vation.

At the e-Tech Africa 2016 Conference, the Information Communication Technology, Postal and Courier Services Minister, Supa Mandiwanzira revealed how the Govern-ment rejected a proposal presented by the country’s mobile operators to explore the possibility of banning or stifl ing Over the Top (OTT) services like WhatsApp, Skype and Viber.

This regulatory interven-tion was supposed to help the operators deal with the declining voice revenues in telecoms that have been accelerated by the same OTT services.

Minister Mandiwanzira says the government turned down

this suggestion and instead, encouraged the operators to view this as an opportunity to encourage young Zim-babweans to develop local solutions that can rival the Silicon Valley OTT services while generating revenue that can benefit the country.

This is what led to the tele-coms operators’ commitment to a fund that will support Zimbabwean app developers.

Innovation isn’t that easy

So far this revelation has led to a harsh criticism of local mobile operators and the public has chastised these rich telecoms companies for failing to innovate around technology, opting instead to lobby for the ban of services that have added so much value to the lives of people.

Thanks to the Minister’s disclosure, the “villainous” nature of mobile operators has been exposed and their efforts to stop the inevitable,

or as my colleague would call it, “standing in the way of technology’s natural progres-sion”, have been made clear.

As a consumer, I agree with this line of thought. Rather than lobby for the ban of WhatsApp, Skype, or any other disruptive OTT service, telecoms operators should be figuring out the best way to make something out of the unfolding opportunities pre-sented by mobile broadband services.

Aren’t there enough resources in the national tel-ecoms operators’ war chests to figure out smart solutions that can, at least, stem the tide of communications dis-ruption while maintaining the services that we all enjoy? After all, they did that with social media bundles, right? They should have an idea of what to do next.

The reality, though, is that these operators are respond-ing to changes that they

19 analysis19 ANAlYsIs

Zimbabwe’s failed whatsApp ban just exposed the mobile operator’s struggle with innovation

20 analysis20 ANAlYsIs

never anticipated, whose effects they can’t control. The request for the ban, or regulation is, as has been the case in countries like Morocco and most recently South Africa, a way to con-tain the damage. That hardly justifies it, but it puts the request into context.

Service re-engineering and the development of new rev-enue centres don’t happen that easily, especially within organisations that are not grounded in innovation. Our mobile operators are cer-tainly not built to respond in that way, opting instead to adopt external solutions before adapting them to local conditions.

The innovation required cer-tainly doesn’t happen when it ’s prompted by sudden changes to the status quo. This same spirit of sudden disruption is an extension of all new age technologies and is, in some sense, analogous to what we are seeing with on-demand services like

Airbnb and uber that are upending service lines that have existed for generations.

There is no quick solution that can save that situation, and least of all from the providers of the traditionally sound, cash spinning busi-ness models.

Mobile network operators are unfortunately stuck in the middle of a similar industry metamorphosis storm which has been accelerated by the very same technologies that they have always wanted to deliver to subscribers.

Over the years, they have invested fortunes in expand-ing and improving the delivery of stable services like voice communication while also ploughing into the future through broadband services investments which are now, ironically, rendering their cash cows irrelevant.

It’s a dramatisation of the internet and technology’s two-faced nature. If you cap-

ture it and use it to provide a solution, it will accelerate your service’s growth and development and by riding that wave successfully you will be rewarded handsomely. However, the same wave that elevates you can just as easily wipe you out, making way for a new solution that makes you redundant.

Mobile operators had their golden years – opening us to voice communication and lit-erally placing the key to the digital age in the palm of our hands. They have (at a very high cost to the consumers) brought communication and knowledge to people’s finger-tips and are stil l redefining the possibilities of financial inclusion faster than would have been possible in our lifetimes.

In the process, they built up new industries and tore down others, upturning services that had enjoyed a firm place in people’s lives. It’s a script that the postman, phone shop worker, internet

cafe owner and retail banker know too well. Now it’s the telecoms operators’ turn to be the star of the show.

It’s hard to say just how quickly mobile telecoms will be outpaced by OTT services. With the slow adoption of mobile broadband and regu-lators that aren’t as vigilant about the cost of data, even the least dynamic operator is guaranteed to survive for an extensive period as people stil l hold on to “outdated, low entry technology” like voice communication and SMS.

At the same time, you never know how the next lobby effort plays out. If the people with the final say at the time aren’t as forward minded or politically savvy, we just might get WhatsApp banned. For now, let’s just be glad that it ’s just a passing debate on telecoms innovation and sensational suggestion. – .TechZim

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