REVIEW OF THE YEAR
The company achieved good subscriber and service revenue growth during 2016 which resulted in sustained margins and profitability levels despite the challenging economic environment. These achievements were supported by the introduction of new consumer and business enterprise products, strong brand and well contained cost management strategies.
A high inflation environment, high interest rates and the impact of volatile exchange rates on our significant foreign currency denominated expenditure continued to drive increased costs for the operation. Although the current levels of profitability are encouraging, TNM requires a significant higher level of profitability to ensure the sustainability of future investment in infrastructure expansion projects and the upgrade of its technology, as well as further coverage expansion.
Despite the economic environment, the company has been successful with initiatives taken to improve its revenue streams and cost management projects, which resulted in an EBITDA margin maintained at 35% in 2016 (2015: 35%). Net financing cost decreased to MK 4,250 million (2015: MK 4,454 million) which includes foreign exchange losses of MK 815 million (2015: MK 1,496 million). Net profit after taxation for 2016, increased by 52% to MK 8,206 million, from MK 5,414 million in 2015. TNM invested in capital expenditure of MK 9,176 million in 2016 (2015: MK 12,028 million) which mainly consisted of 4G LTE technology, Lilongwe and Blantyre capacity and coverage expansion, fixed broadband and mobile broadband technology, and various other technology upgrade projects in the unified communications space.
The company continues to pursue its stated strategy to become the preferred ICT provider in Malawi through focus on improved customer experience and product innovation. The macro economic environment is expected to remain challenging putting pressure on margins and service revenue and management will continue to pursue cost efficiencies to protect margins.
Total Dividends of MK 3,313 million at MK 0.33 per share: (2015 MK 0.30 per share) are proposed for the period ended 31 December 2016:
MK 1,004 million : 10t per share was declared in June 2016 and paid in August 2016.
MK 1,004 million : 10t per share was declared in December 2016 and paid in January 2017.
MK 1,305 million : 13t per share to be declared at the upcoming AGM*
*The Directors propose a final dividend of 13 (Thirteen) Tambala per share out of the profits of the company for the year ended 31 December 2016, to be declared at the forthcoming Annual General Meeting.
BY ORDER OF THE BOARD
Chief Executive Officer