TNM first half profits dip 30%

TNM indicated in a cautionary statement to its shareholders last week that its profit after tax for the six months ended June 2012 will be 30 percent lower than the same period last year.

TNM company secretary Christina Mwansa, in a statement, attributed the low profits to foreign exchange losses incurred as a result of the devaluation of the kwacha in the second quarter of the year and resultant increases in finance charges.

The company’s after-tax profit for the year-ended December 31 2011 jumped by 16 percent from K1 billion in 2010 to K1.36 billion in 2011.

This profit upsurge was attributed to the growth in subscriber base that jumped by 35 percent in 2011 as well as growth in market share which rose from 37 percent to 42 percent.

Earlier this year, TNM announced a $20 billion investment to help the company increase its penetration and trigger tariffs drop.

“Our priority at this stage is to spend money on reducing redundancy and sustainability of the core network system. We have 80 massive computer savers running in the core network. All of that needs to be duplicated in different locations so that whatever disaster may strike, we should have network continuing,” said TNM chief executive officer Willem Swart.

He added that the company plans to boost network capacity to meet the demands of their growing subscriber base. Swart said they plan to continue rolling out coverage in commercially viable areas and also invest heavily in areas that are not commercially viable.

The company’s penetration level on the local market is currently 30 percent but it plans to go up to 50 percent.