Despite recording a 52 percent increase in profit before tax in the year ending December 31, 2016, integrated mobile network operator, TNM, says its business was greatly affected by persistent power outages.
Outgoing TNM Chairperson Matthews Chikaonda lamented that the inconsistent and insufficient power supply had serious repercussions on the firm’s running costs in 2016.
Chikaonda was speaking on the sidelines of the company’s 22nd Annual General Meeting held in Blantyre on Thursday where he, however, touted a 13 percent rise in customer base.
“We get black outs often, it’s not a new story. My cost of doing business is increased because of that insufficient and inconsistent power supply. As a nation we have to accept that we need to improve our systems,” said Chikaonda.
He said running on alternative sources of energy has proven costly, saying diesel could cost the business $ 0.50 cent per kilowatt hour while running on Escom electricity would cost $ 0.11 cent per kilowatt hour if consistently available.
Chikaonda further reiterated that the operating environment remained hostile for doing business with key fundamentals remaining in red in the year.
He then faulted what he called ‘policy inconsistencies’ which affected most businesses last year.
In his report to the shareholders earlier, Chikaonda, however, touted the company’s resilience and positive performance in the year under review despite the challenging operating environment.
Key resolutions at the indaba included adoption of the year’s financial report where the company also declared a final dividend of K 1.3 billion, representing 13 tambala per share.
During the meeting some minority shareholders questioned the rationale behind a 15 percent rise in the company’s directors’ remuneration, among others.
At about K 6.6 million, K 5.8 million and K 5.2 million, respective annual retainer fees for chairman of board, chairman of committees and other non-executive directors, the rates were considered the highest compared to fees for the rest of the other Press Corporation Limited (PCL) subsidiaries, including the conglomerate itself, according to the irate minority shareholders.
But Chikaonda, himself a former PCL boss and TNM CEO Douglas Stevenson justified the rates, saying they were in line with international standards.
TNM has reported a profit before tax rise of 52 percent from K 5.41 billion in 2015 to K 8.21 billion in 2016.
In addition, the firm saw its subscriber base growing by 13 percent to over 4.3 million in 2016.