Two of Malawi Stock Exchange (MSE) listed companies, Airtel Malawi plc and Sunbird Tourism plc have projected significant profit surges for the year 2025 in a stunning display of resilience that defies a backdrop of a harsh economic environment.
The news, delivered in separate unaudited trading statements released last week, shows remarkable resilience in a business environment grappling with rising inflation, which has hovered at above 30 percent for most of the year and a high policy rate currently pegged at 26 percent.
In a statement seen by Business News, Airtel Malawi plc said it anticipates its profit after tax to rise by a staggering 380 percent to 409 percent, translating to a potential windfall of between K43.1 billion and K47.7 billion.
This remarkable turnaround comes after a K15.4 billion loss after tax in 2023, painting a picture of a dramatic recovery and strategic triumph in the face of adversity.
On its part, Sunbird Tourism, a key player in Malawi’s hospitality sector, forecasts a profit surge of 102 percent to 122 percent, aiming for a total of K10.7 billion to K11.8 billion. This impressive growth, building on the previous year’s K5.3 billion profit, signals a resurgence in tourism despite the economic headwinds that have plagued the country.
These positive projections stand in stark contrast to the prevailing economic environment. Inflation, a relentless adversary for most of the year hovering at above 30 percent, has eroded purchasing power and squeezed household budgets.
The central bank’s policy rate, currently at a stifling 26 percent, has made borrowing expensive, hindering investment and business expansion. Adding to the woes, persistent foreign exchange shortages have hampered imports and disrupted supply chains, thereby creating further challenges for businesses.
Meanwhile, economic analysts have differ on whether this growth is sustainable in the prevailing economic environment.
Market analyst Bond Mtembezeka, who is also Business Partners International Business country director for Malawi, said the performance registered by the two companies this year seems sustainable.
“Airtel’s seemingly bad performance of 2023 was largely due to foreign exchange losses, otherwise the performance was equally great,” he said in a WhatsApp response. “Corporate business anchors Sunbird’s performance and corporate customers are usually price insensitive.”
The analysts further noted that it would be “quite a challenge” for small and medium enterprises (SMEs), most of whom were reportedly struggling, because they have different business models and balance sheets.
Said Mtembezeka: “SMEs operate withthin balance sheets and hence are very vulnerable to shocks. Further, most SMEs move with business cycles and that poses significant business risk to SMEs.”
He, thus, urged the government to enforce the policies and measures it has put in place to cushion local SMEs such as the Buy Malawi Strategy.
But speaking separately, Scotland-based Malawian economist Velli Nyirongo expressed doubt that the performance could be sustained or replicated in the long-term.
He, however, observed that the firm’s performance appears to be a combination of structural and adaptive responses.
Said Nyirongo: “Inflationary trends likely played a significant role, particularly in sectors where pricing adjustments can pass through to consumers.
“However, such growth could be precarious if it relies primarily on macroeconomic distortions rather than long-term operational or market efficiencies.”
On his part, Catholic University economics lecturer Derrick Thomo noted that the companies can sustain the profits in the long-term, provided they can effectively adapt to the tough economic conditions.
