MTL profit hit hard by pandemic
Malawi’s fixed phone and broadband operator, Malawi Telecommunications Limited (MTL) has experienced a hard knock to its profits as it struggles in an economy hard hit by COVID-19 slowdowns and disruptions.
The listed Press Corporation Limited, which controls MTL and mobile operator Telkom Networks Malawi (TNM), has reported a significant profit decline for MTL during the 2020 financial year. TNM also recorded a 48% decline.
The telecommunications segment “registered a 46% decline in its profit” after tax for the period under review.
“The fixed line company continued to make losses, albeit, lower than last year. The mobile phone company registered a 48% decline on its net earnings due to challenges faced in revenue generation,” said Randson Mwadiwa, chairman for the board of Press Corporation.
Mwadiwa added that this was mainly because “critical equipment needed for capacity and efficiency improvements was delayed due to lockdowns in countries of origin”. The company was also affected by the “impact of tax provisions” levied by the Malawi Revenue Authority.
Prevailing foreign currency shortages and related knock-on effects on its exchange rates have remained “major downside risk” factors.
“The significant increase in public debt poses another major challenge to economic growth,” Mwadiwa continued.
The government of Malawi has continued to exert pressure on Press Corporation to quickly address the situation.
In January this year Nyasa Times quoted Malawian Information Minister, Gospel Kazako as saying: “MTL poses a lot of questions that we must all answer, should there be problems you should be speaking to a partner that is well informed and find (a) solution together.”