Two listed companies from the telecommunications industry, TNM plc and Airtel pcl, have projected to post subdued profit for half year ended June 2022 as the operating environment remains volatile.
In separate statements, the two firms say they expect their profit after tax to be lower than same time last year.
TNM says it expects its profit after tax for period under review to be 130 percent lower than the previous corresponding period while Airtel plc expects a post-tax profit drop of between 20 to 25 percent for Airtel Malawi.
“The adverse deviation has arisen from foreign exchange loss suffered from the recent 25 percent Malawi Kwacha depreciation,” read separate statements from the two listed companies.
In May this year, the Reserve Bank of Malawi devalued the local currency by 25 percent, a situation which has piled intense pressure on local consumers as the buying power has eroded.
The central bank said the Kwacha devaluation was an attempt to aligning the local unit with the then trends and giving the Kwacha its true value.
Between January and June last year, Airtel plc profit also went down marginally to K11.3 billion from K 11.4 billion during similar period in 2020.
“This is mainly due to forex loss of K4.0 billion in H1’21 on the back of Kwacha weakening against major foreign currencies. In the same period previous year, the impact of forex loss was K52 million,” indicted Airtel in a statement.
For TNM, during the same period in 2021, net profit after tax increased by 19 percent to K4.5 billion from K3.7 billion during the same period in 2020.
Speaking during the TNM Annual General Meeting in Blantyre last month, TNM Board Chairperson Ted Phiri said the devaluation has increased the firm’s operating costs by approximately by K4 billion.
He however assured that the company will make sure that they bring business strategies that will spur revenue growth.
“It is our inspiration to make a good return for the shareholders and we are working hard to mitigate the risks that we experienced and realize better revenue and profit for the company,” he said.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.