ZAMTEL insincere about business performance

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Transport and Communications Minister Brian Mushimba launches ZAMTEL Kwacha as ZAMTEL Acting Chief Executive Officer Sydney Mupeta (L) and Bank of Zambia Governor Denny Kalyalya (R) look on
Transport and Communications Minister Brian Mushimba launches ZAMTEL Kwacha as ZAMTEL Acting Chief Executive Officer Sydney Mupeta (L) and Bank of Zambia Governor Denny Kalyalya (R) look on

Dear Editor

I look time to review Zamtel’s financial results for the period ending 30 April 2017, following various pronouncements made by Zamtel’s management on the performance of the business including the 1.7million subscribers on the Zamtel Network.

  • Zamtel’s net revenue increased 3% to K38million at the end of April.
  • The company’s operating costs, excluding depreciation, increased by 7% to K 42million. EBITDA deteriorated from -5% to -8% and the average EBITDA loss for the period being K 13million ( -8%).
  • Zamtel recorded a loss before interest and tax of K 98million for the period ending April.
  • Zamtel has not been able to maintain good cash management with no free cash flow and a high gearing ratio with very high net debt.
  • Zamtel reported the active mobile subscribers increased to 1.7million, with a blended average revenue per user of K 10.
    Zamtels’s key financial highlights include:
  • Net revenue increased 3% to K38 million (K 151million for the period)
  • Operating expenses, excluding depreciation, K 164million
  • EBITDA loss of K 13million (-8%) while EBIT loss was K 98million
    Shareholders’ value/investment to the sum of K 1.6billion have eroded by the accumulated loses of K 2.7billion
  • Total liabilities are now K 2.9billion against K 300million current assets
  • Owes ZRA and ZICTA over K 200m and K 80m respectively

Zamtel’s management should be sincere when they are communicating the performance of the business to us Zambians. This performance is way below its peers in the telecoms industry. Both MTN and Airtel’s average revenue per month is over K 160million. Let the public be the judge.

By Joseph Sichula

33 COMMENTS

  1. bunch of bozo’s who don’t know how to run a company… they should allow some of us Zambian’s with rich telecoms experience to turn that company around…

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    • The forecast will remain the same given that an Engineer will be given that position…govt does not care about these numbers so long as cadres and minister’s girlfriends are employed.

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    • Weldone Joseph!
      You have provided an objective analysis.
      Please do the same with Zampost where the CEO has been lying with impunity. Sometimes you wonder why people pretend to be christians!
      Zampost is slowly dying under the current management

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    • Gary – if you are using an android mobile platform simply install adblocker and your problem will be sorted. LT is the worst website out there for ads!!

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    • GOVERNMENTS SHOULD BE JUDGED BY PERFORMANCES OF PARASTATALS
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      I escalate this to ECL and his Finance Minister! Guys, get to work. There may be no smoke without fire! But only a report from Auditor General is credible. Ba Joseph Sichula, how credible are those figures ai? Where did you get that Financial Information about Zamtel? You could be right after all. I am waiting to hear from ECL as he returns from LESOTHO.

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  2. A job well done Joseph Sichula. How I wish we could start analysing the whole economy using numbers i.e. GDP

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  3. When you see a company CEO talking about revenue and not profit ….just know something is wrong. There is too much waste in these companies and they continue to promote from within..

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  4. Most gov’t parastatals are loss making entitles. Reasons are that directors are picked on political and tribal inclinations and not on performance. So, what do u expect? There is poor corporate governance. Let professionals run these institutions without any political influence. Zambia will never develop with this kind of mediocrity we like.

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  5. Zamtel will never succeed as a Parastatal because the ICT sector is very dynamic and parastatals in Zambia have generally been designed to be very slow at decision making, they are heavily influenced by irrelevant and wrong political appointments at Board Level and Senior Management Level which is then followed by wrong decisions way down through to operations, performance and results. When Zamtel was privatized it started performing! THE SIMPLE TRUTH IS THAT FORGET ZAMTEL FOR AS LONG AS IT IS A PARASTATAL.

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    • @7 Aristole, while I agree with you in the fact that our Parastatals are poorly run due to our wrong politics, I disagree with that as Parastatal Zamtel cannot make money! IT IS ALL TO DO WITH DISCIPLINE AND CORPORATE GOVERNANCE! LAPGREEN that had bought Zamtel, is NOT as such a private company. IT IS (WAS) a LIBYAN GOVERNMENT PARASTATAL created through a sovereign fund as part of diversifying investment from oil. So what may be correct to say is FORGET ZAMTEL AS LONG AS WE DO NOT REFORM THE WAY WE RUN PARASTATALS. Parastatals CAN MAKE MONEY TOO, it is all how we run them. We should find business minded persons to run them, NOT necessarily Engineers for Zesco & Zamtel.Though I have no details, I believe ZSIC at one time when CHIBAMBA KANYAMA worked there had a financial turn around.

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    • The fact is that ZAMTEL will never perform as long as it is a Zambian parastatal. This has nothing to do with parastatals as a concept or model. It is just that parastatals are not well suited to the Zambian culture and its politics, where every one is out doing each other in dancing to the King of Zemunda. We as a people are a bunch of spineless cowards who can not make independent and objective decisions which may be at variance with political correctness of whoever is in power. All the state media, all the institutions, all the state research are only there to confirm the great wisdom of those in power. How can there be an honest debate in such circumstances. Do ZNBC journalists ever watch BBC? It is honest debate that throws up the best ideas not sycophancy. Since we can not change…

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    • It is kind of thinking that has made Zambia a poor country. Do you know that most the riches people in the world have invested in ICTs? Now tell me then why we as country, can fail to run a business in an industry with ready market, equipment vendors like Huawei and ZTE already in the country and looking for an opportunity from GRZ to supply their world-class equipment.
      As a country, we ought to be serious with the way we handle public companies like ZAMTEL and not just politiking. Companies like Zamtel are for all zambians. But it appears zambians do not understand this fact and are not concerned about any abuse that may be going in these companies.
      If these companies where properly run we can see alot of serious job creation and at the same avoid loss of FOREX through profit…

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    • @Aristotle
      You sound blunt but on point.
      CEC makes profit as ZESCO keeps wallowing in loses. Hiking tariffs and draining all forests.
      Kantemba ZOONA makes profits as ZAMPOST’s bottom line remains a mess.
      ZISC has run down as tuma insurance companies like DIAMONG, MADSON and what have you are making profits.

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  6. @Aristotle, I cannot agree with you more. You are spot on. When Zambians remove emotions, they too will agree with your observations. Brilliantly put!

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  7. On second thought I think terms like “EBITDA” are too much for a common man. Maybe that is the reason politicians ensure that local education standards are low for the masses and send their children abroad for better education

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  8. Where’s Mushota with her pH’d to comment on a quantitative analytical article?

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  9. Well put Mr. Sichula, I hope with this will help the power that be make certain decisions.

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  10. When explaining the financial performance of a company to the masses we dont need EBITDA, all we need to know is what is the profit after all liabilities.

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  11. Earnings Before Interest, Taxes, Depreciation and Amortization
    A measure of a company’s ability to produce income on its operations in a given year. It is calculated as the company’s revenue less most of its expenses (such as overhead) but not subtracting its tax liability, interest paid on debt, amortization or depreciation. It is important to note that EBITDA does not account for one-off or otherwise unusual revenues and expenses, only recurring ones. It is a less common measure than EBITD or EBIT.

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  12. Earnings Before Interest and Tax
    A measure of a company’s ability to produce income on its operations in a given year. It is calculated as the company’s revenue less its expenses (such as overhead) but not subtracting its tax liability or interest paid on debt. It is important to note that EBIT does not account for one-off or otherwise unusual revenues and expenses, only recurring ones. EBIT represents cash available to pay off creditors in the event of liquidation and, as such, it is closely watched, especially when the company incurs little depreciation or amortization. It is also called operating profit.
    “Please not that I’m using google I also dont know”

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  13. this is beyond Mushota understanding….. Probably if she had a degree from Matero University.

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  14. Blame Mmembe who influenced gullible Sata to repossess the company for no reason apart for the hatred the pair had for Rupia Banda. Surely how can you get a company back without any new plans for it.

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  15. The government should try the KK philosophy, ëngaging the most critical people with nice and critical theories to run such enterprises.”Unfortunately, most of them failed lamentably.However, Indeco must take this analysis seriously and work on suggestions, if there are any in the analysis.This was a very profitable company before privatisation.
    By the way where did this analyst get all these numbers from.Smuggled out with the help of sabotours or from the right people.Usually such an analysis is supposed to quote the source of the information to be taken as an aunthentic analysis

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  16. Give a man a fish and you have to feed him everyday.Teach Homo Africanus how to fish and you still need to feed him everyday.

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  17. I have taken time to read the comets here. All I can see is how shallow minded some people can be in making some contributions. No wonder the country is poor and it is not moving because of you guys on this blog probably including myself. Your analysis is too shallow. For any business to succeed capital investment is cardinal. Talk of the private companies like MTN and Airtel, the shareholders recapitalise these companies every year to grow the business they don’t depend on internally generated revenue to grow the business NO. Now ask yourself how many times has the shareholder funded these parastatal companies and held management accountable? We are very good at talking and we don’t do what we talk about. If you run a simple katemba and you are not investment in it do you expect to…

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    • Have you ever heard of term called project finance? If you have and then you pass such a comment then you are a reason why our country is poor.

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    • this man must be guilty of something; hope yuo are not one of the managers in one of these low perfromingar pastatals or a benefeciary somehow

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