TNM net profit jumps 102 percent to K5.2bn

Malawi Stock Exchange (MSE)-listed mobile network provider TNM has registered a 102 percent increase in profit after-tax of K5.2 billion in the year ended December 2014 from the previous year’s K2.5 billion.

According to a published financial statement jointly signed by the company’s board chairperson Matthews Chikaonda and managing director Willem Swart, the company was successful with the actions taken to improve revenue streams and the cost management projects, which resulted in the improvement of the EBITDA [earnings before interest, tax, depreciation and amortisation] margin, among others.

“The company achieved strong levels of subscriber and service revenue growth during 2014, which resulted in a significant increase in profitability. These achievements were supported by the successful implementation of various projects and cost management strategies,” reads the statement.

However, the service provider’s financing cost decreased to K2.8 billion from K3.1 billion, which includes foreign exchange losses of K420 million from K633 million in the previous year.

The company cited high inflation environment, high interest rates, volatile exchange rate movements and a significant increase in regulatory fees as drivers that continued to increase the cost of operations.

“Although the current levels of profitability are encouraging, TNM requires a significant higher level of profitability to support the projects and the upgrade of its technology,” reads part of the statement.

Meanwhile, the telecommunications firm which acquired the ISP business and related infrastructure assets from Burco Electronics Systems Limited says it will use the investments as the foundation to develop the TNM Business services division which will focus on the needs of the enterprise and small and medium enterprise (SME)customers.

Amid the slowdown of in business this year, TNM says it is optimistic that the profitability of the business will further improve, saying the company has initiated various business expansion strategies.

The directors have since proposed a final dividend of 10 tambala per share out of the profits of the company for the year ended December 31 to be declared at the forthcoming annual general meeting.