TNM has recorded an after-tax profit of K405 million (about $1.6m) in the first half of the year ended June 30 2012. This represents a 31 percent decrease from K587 million (about $2.3m) recorded during the same period last year.
The financial statement TNM released last week, signed by its chairperson Professor Matthews Chikaonda and vice-chairperson Hitesh Anadkat, says the expenditure of the company was impacted negatively by the shortage of foreign currency and subsequent devaluation of the kwacha which saw major increases in the firmâ€™s operating and administrative overheads.
â€œThe devaluation of the kwacha resulted in foreign exchange losses of K389 million (about $1.5m) and a significant increase in borrowing costs.
â€œThe net finance charges of K70 million (about $280 000) for the period (inclusive of foreign exchange losses), represents an increase of K511 million (about $2.0m) from the corresponding period in 2011,â€ says the statement.
The company sees the difficult economic situation characterised by high interest rates and inflation continuing for the next 12 to 24 months and that it will negatively affect its profits.
â€œThe results for the full financial year ending December 31 2012 are expected to show an improvement from the 2011 financial year.
â€œTNM is taking necessary actions to sustain the profitability of the business which includes tariff increases and aggressive cost containment,â€ reads the statement in part.
The company, however, observes that TNM has maintained its growth momentum with service revenue increasing by 39 percent and registering growth of 32 percent compared with the same period last year.