Major investor drops Malawi Telecommunications Ltd
Malawi’s Press Corporation is divesting from fixed phone and broadband operator, Malawi Telecommunications Limited (MTL).
As is the case in other African countries, Malawi’s fixed phone market continues to face pressure as more cost effective digital communication channels develop.
Listed on the Malawi Stock Exchange (MSE) Press Corporation is a major investor in the country’s telecommunications industry and also has an interest in mobile operator, Telkom Networks Malawi (TNM).
On Wednesday, Press Corporation confirmed its decision to dispose of its stake in MTL, although it offered no further details.
“The PCL Group has decided to exit MTL and discussions with equity investors in the fixed telephony business are at an advanced stage,” said Lyton Chithambo, acting chief executive.
Press Corporation acknowledged the cost containment measures introduced by MTL and the impact this had had on the company’s results in the year to the end of December 2021.
“MTL reported a significant improvement in its results driven by improved gross margins and cost containment which resulted in a loss reduction of 46% from (the) prior year,” added Chithambo.
As a combined segment for Press Corporation, TNM and MTL registered a 54% growth in after-tax profits to approximately US$8-million for the same period.
But profitability in TNM was 24% stronger, “signalling the potency of the various recovery initiatives put in place” by the company.
Chithambo said, “The company continues to focus on enhancing its infrastructure with a view of improving its customer experience.”
Press Corporation said Malawi’s operating environment remains challenging, with inflation, foreign currency depreciation and interest rates singled out as among the difficulties.
Conflict between Ukraine and Russia has also impacted on Malawi’s ability to achieve its projected GDP growth of 4.1% in 2022.