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Telekom Networks Malawi expects 20% growth in profits

Telekom Networks Malawi expects 20% growth in profits

Telekom Networks Malawi (TNM) is expecting after tax profits for the year to end December 2016 to be 20% higher, according to a cautionary released this week, beating tough economic odds worsened by currency weakness in the current year.

TNM – which had about 3.1 million subscribers as at the end of March 2016 – has also said its network users jumped by about 20% during the interim period to June 2016 compared to the prior contrasting period.

"Telekom Networks Malawi Limited accordingly advises that profit after tax for year ending December 2016 is expected to be at least 20% higher than the previous corresponding period," Christina Mwansa, secretary for the company said in an emailed cautionary on Thursday.

The southern African country's second largest mobile operator by subscriber base has in the first half of the current year sought to boost its network to better attract users and drum up revenue generation through launching LTE internet services.

It has also reported that it's Mpamba mobile money service now has one million users. In the year to December 2015, Telekom Networks Malawi posted a 24% growth in service revenue to US$72.2 million or Malawi Kwacha (MK49 447 million).

This translated to a net profit after taxation amount of about US$7.9 million. Average revenues per user for the 2015 year stood at US$2.12 cents and are expected to have firmed up during the current year.

Its profit position in US Dollar terms is however expected to take a knock as a result of 2016 currency weakness.

The Malawi and Mozambique Telecommunications Report Q4 2016 recently published by Business Monitor International says Telekom Networks Malawi stands to benefit from its investment in an LTE network.

"Telekom Networks Malawi's launch of LTE will improve broadband connectivity and quality across the country. However, the low penetration of mobile services and the challenging macroeconomic environment will inhibit the uptake of 4G services," says the report.

The cautionary advising of the expected profit surge for 2016 year has been issued in terms of the Listings Requirements from the Malawi Stock Exchange.

Listed companies in Malawi are required to publish "a trading statement as soon as there is a reasonable degree of certainty that the financial statements for the period to be reported upon next will differ by at least 20%" from the past corresponding period.

TNM will publish its financials for the current year in March 2017.

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