TNM sees annual profit dropping by 90 percent
TNM plc has projected a 90 percent decline in after-tax profit in the year ended December 31 2022, according to a trading update issued by the Malawi Stock Exchange (MSE)-listed firm.
In 2021, the company posted a 25 percent increase in profit after-tax of K9.69 billion, a jump from K7.73 billion posted during the previous year on account of increased data revenue and earnings before interest, tax, depreciation and amortisation, among others.
With the likely drop, it means TNM plc after-tax profit will be at around K969 million for the period ended December 31 2022.
In a trading statement, the group’s company secretary Christina Mwansa said the information on which the trading update is based has not yet been reviewed or reported on by its auditors.
“Telekom Networks Malawi plc’s financial statements for the period will be published in the press by April 2023 following approval by the board of directors,” she said.
In the first half of this year, TNM plc reported a K1.34 billion loss, a development the company attributed to the impact of the 25 percent devaluation of the kwacha effected on May 27 this year.
According to the published statement, TNM plc incurred foreign exchange losses in view of weakened kwacha.
TNM plc financial results for the six months period ended June 30 2022 showed that during the period, it lost K1.41 billion in the six month period due to depreciation of kwacha.
The firm’s net financing costs increased by 81 percent to K501 billion from K2.77 billion recorded in a similar period last year due to foreign currency accounting losses recorded because of the devaluation of the kwacha.
TNM plc said this resulted in profit after- tax declining by 133 percent to a loss of 1.34 billion. This compares to a profit of K4.51 billion chalked during a similar period last year.
In August this year, TNM plc increased its tariff by 20 percent, resulting in customers paying more for voice and data services.
In a statement, the mobile operator said the price hike was due to the rising cost of doing business occasioned by devaluation of the kwacha coupled with inflationary pressures.
Reads the statement: “As a result, with the recent changes in the business environment, a corresponding adjustment of our tariffs is necessary to protect shareholder value and capital exposure of the business, while maintaining TNM’s goal of offering high quality and affordable telecommunication products and services.”
The share price for TNM plc, which has 10.04 billion shares in issue, traded at K14 per share on Friday.
This is a decline from K22.92 recorded during the same period last year.
TNM plc is one the two telecoms firm listed on the 16-counter MSE. The other one is Airtel Malawi plc.
