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Telecoms stocks expect good tidings

Telecommunications sector stocks on the Malawi Stock Exchange (MSE) project their year-end profits to be above the previous year, a development that signals that the firms have weathered the tough economic environment in the just-ended year.

The two stocks, TNM plc and Airtel Malawi plc, have projected an increase in their profits for the year ended December 31 2021, according to published trading updates.

In its published trading statement, TNM plc says it expects to record a 20 percent jump above that of last year.

In 2020, TNM posted a profit after-tax of K7.7 billion and this means with the projected 20 percent increase, the profit could go up to K9.8 billion.

Airtel plc, on the other hand, expects a 35 percent increase in profit compared to that of last year.

In 2020, the company made a profit of K22.09 billion and this means that in 2021, based on the forecast, the company will likely record a profit of about K29.82 billion.

In the just-ended year, most of the businesses were affected by the impact of the Covid-19 pandemic, which pushed up the cost of doing businesses.

However, the positive projections could mean a sign of recovery is on the cards and that the telecoms sector is on good footing, according to Blantyre-based investment and advisory firm Bridgepath Capital Limited chief executive officer Emmanuel Chokani.

“Covid-19 has led to increased digitisation and also working from home thus pushing up revenues for these companies,” he said.

MSE operations manager Kelline Kanganyala has indicated that the market outlook remains positive as return on investment has remained above inflation giving a positive real return to investors.

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