TNM reports K13 billion profit

Telekom Networks Malawi (TNM) has announced a profit after tax of K13.10 billion (U$17.88 million) for 2017 up from K8.21 billion (U$11.20 million) in 2016, representing a 60 percent increase.

In its 2017 Annual Report, TNM attributes its profitability to revenue growth from voice calls, but notes an increasing contribution from internet and business services as well as mobile money (TNM Mpamba).

The report, co-signed by Chairman Dr George Partridge and Acting CEO Eric Valentine, says despite the company maintaining revenue growth from the traditional voice calls, newly integrated ICT business lines have reported increases in revenue growth and accounted for 20 percent of total revenue, up from 14 percent.

“Although voice continued to be major contributor of revenue growth and profitability, an increasing contribution of our newer business areas is evident, now accounting for 20 percent of total revenue, up from 14 percent in 2014,” reads the report.

It cites data (mobile internet), enterprise services and TNM Mpamba as the non-traditional business streams whose contribution to total revenue has grown.

The report indicates that, of the total revenue of K82.10 billion (U$112 Million) up from K65.55 billion (U$89.46 Million) in 2016, the three newer business lines contributed a total of MWK16.12 billion (U$22 Million), up from MWK11.60 billion (U$16.83 Million) in 2016.

“Data revenue grew consistently over the year. This was achieved through investment in 4G and U900 technologies. Data is a growing segment of our business as more and more people use it for their everyday life, whether for work or home,” reads the report in part.

In 2017, TNM retained profits amounting to K15.8 billion (U$21 million) to invest in future innovations which included upgrading its 4G network to 4.5G/LTE capability in major cities of the country, and expanding mobile internet coverage beyond and in outlying areas.

“Through the August 2017 launch of our 4.5G network platform, we are realizing our objective of bringing world-class mobile and fixed ICT services to Malawi through our expanded network coverage and a platform that enables value added business and enterprise communication products,” says the annual report.

It notes that a more favourable macro-economic environment characterized by falling inflation and interest rates and firming exchange rates, supported TNM’s strong performance in the year under review.

“The volatility of the Malawian economy over the past five years has subsided creating a more stable environment, with falling inflation rates, lower interest rates and a firmer exchange rates resulting in expenditure savings,” reads the report.

TNM plc. notes that its investment programs and business model created a wealth of K50.25 billion which was shared across the board by shareholders, employees, government, lenders and distribution partners while some was used for technology investments.

The annual report says from the total revenues generated, government and the regulator, Malawi Communications Regulatory Authority (MACRA) received a total of K30 billion in the form of different taxes, levies, licenses and fees.

TNM further notes that during the period under review, its market share rose steadily to nearly 50 percent while subscriber base exceeded the 3.2 million recorded in 2016.

The company declared a total dividend of K6.024 billion or 60 Tambala share, the third portion of the dividend being 25 tambala per share which, having been approved at the AGM, will be paid by July 13th 2018.

“The dividend payout is in line with the high levels of strategic investment in infrastructure. Reinvesting the profits is a key driver of growth and sustainable shareholder value in the long-term, especially in this fast evolving technology industry,” reads the report.

Meanwhile, in a Trading Statement released earlier this month, TNM forecast its profit after tax for the half-year ending June 30 to rise by at least 40 percent which is evidence of the company’s current robust growth momentum.