Summarised unaudited consolidated and separate financial
Statements for the six months ended 30 June 2023
Performance
The Board is pleased to announce the unaudited interim financial results for the group for the six months period ended 30 June 2023.
The group has taken a positive trajectory from the dismal performance experienced over the last 18 months. All key performance metrics are showing signs of recovery and are moving towards the right direction.
The group registered a 17% increase in revenue to MK51.27 billion (2022: MK43.78 billion) due to growth in data revenue by
22% to MK20.47 billion (2022: MK16.77 billion) and Mpamba revenue by 35% to MK8.36 billion (2022: MK6.18 billion).
KEY FINANCIAL HIGHLIGHTS
17% | MK 51.27 |
growth in total revenue to | billion |
35% | MK 8.36 |
SUMMARY STATEMENTS OF COMPREHENSIVE INCOME
In billions of Malawi Kwacha
Group | Group | Company | Company | Group | Company | ||
unaudited | unaudited | unaudited | unaudited | audited | audited | ||
six months | six months | six months | six months | year ended | year ended | ||
ended | ended | ended | ended | 31-Dec-22 | 31-Dec-22 | ||
30-Jun-23 | 30-Jun-2230-Jun-2330-Jun-22 | ||||||
Service revenue | 51.27 | 43.78 | 43.65 | 38.23 | 96.35 | 83.38 | |
Cost of sales | (35.36) | (32.03) | (31.43) | (28.95) | (65.47) | (58.11) | |
Gross profit | 15.91 | 11.75 | 12.22 | 9.28 | 30.88 | 25.27 |
SUMMARY STATEMENTS OF CHANGES IN EQUITY
In billions of Malawi Kwacha
Group-unaudited
Balance as at 1 January 2023
Comprehensive income for the period
Balance at 30 June 2023
Group-unaudited
Share | Share | Retained | TOTAL |
Capital | Premium | earnings | |
0.40 | 2.35 | 43.81 | 46.56 |
- | - | 0.78 | 0.78 |
0.40 | 2.35 | 44.59 | 47.34 |
EBITDA margin increased to 36% (June 2022: 28%) due to cost containment initiatives that the company continues to implement and monitor. Net profit after taxation increased by 158% to a profit of MK0.78 billion (June 2022 loss of MK1.34 billion).
The group invested MK7.00 billion in capital expenditure during the period (June 2022: MK9.31 billion) notably in distribution systems, network and systems catering for expansion, improvement, and future use as data needs grow.
Outlook
The macro-economic environment is expected to remain challenging putting pressure on the group's profitability. The volatile exchange rates, foreign currency scarcity and pressure on inflation will continue to adversely impact the cost of operations.
The group will continue developing and implementing initiatives to drive customer growth, grow revenues, deliver efficiencies in costs and improve overall group financial performance.
Dividends
Due to the need to prioritize on recovery from the recent past subdued performance of the company, the Directors have declared a nil (2022: nil) first interim dividend for the financial year ending 31 December 2023.
Ted Sauti-Phiri | Lekani Katandula |
Chairman | Chairman, Board Audit Committee |
5 Septenber 2023 |
tnm.co.mw |
growth in mobile money revenue to | billion |
22% | MK 20.47 |
growth in data revenue to | billion |
47% | MK 18.24 |
growth in EBITDA to | billion |
158% | MK 0.78 |
growth in net profit after taxation to | billion |
Infrastructure | MK 7.00 |
investment of | billion |
Earnings per share | MK 0.08 |
billion | |
Subscriber base at | MK 4.6 |
million |
Other income | 3.18 | 2.33 | 3.38 | 3.14 | 4.93 | 5.93 | |
Administrative expenses | (11.10) | (10.01) | (10.29) | (9.33) | (25.50) | (22.10) | |
Impairment of trade receivables | (0.33) | (1.11) | (0.31) | (1.11) | (2.45) | (2.45) | |
Operating profit | 7.66 | 2.96 | 5.00 | 1.98 | 7.86 | 6.65 | |
Finance income | 0.07 | 0.06 | 0.04 | 0.04 | 0.12 | 0.07 | |
Finance expense | (6.86) | (5.07) | (7.20) | (5.07) | (9.77) | (9.77) | |
Net finance expenses | (6.79) | (5.01) | (7.16) | (5.03) | (9.65) | (9.70) | |
Profit before income tax | 0.87 | (2.05) | (2.16) | (3.05) | (1.79) | (3.05) | |
Income tax expense | (0.09) | 0.71 | 1.01 | 1.25 | 0.03 | 0.86 | |
Profit/(loss) for the year | 0.78 | (1.34) | (1.15) | (1.80) | (1.76) | (2.19) | |
Total comprehensive income/(loss) for the year | 0.78 | (1.34) | (1.15) | (1.80) | (1.76) | (2.19) | |
Earnings per share (MK) | 0.08 | (0.13) | (0.11) | (0.18) | (0.18) | (0.22) | |
Number of ordinary shares in issue (billion) | 10.04 | 10.04 | 10.04 | 10.04 | 10.04 | 10.04 | |
SUMMARY STATEMENTS OF FINANCIAL POSITION
In billions of Malawi Kwacha
Group | Group | Company | Company | Group | Company | ||||||
unaudited | unaudited | unaudited | unaudited | audited | audited | ||||||
as at | as at | as at | as at | as at | as at | ||||||
30-Jun-23 | 30-Jun-22 | 30-Jun-23 | 30-Jun-22 | 31-Dec-22 | 31-Dec-22 | ||||||
Notes | |||||||||||
Assets | |||||||||||
Non-current assets | - | - | 1.26 | - | - | 1.26 | |||||
Investmeny in subsidiary | |||||||||||
Equity investments | 0.16 | 0.16 | 0.16 | 1.42 | 0.16 | 0.16 | |||||
Property, plant and equipment | 77.58 | 80.98 | 74.84 | 79.49 | 77.70 | 75.57 | |||||
Intangible assets | 12.24 | 11.27 | 12.32 | 10.62 | 14.19 | 14.11 | |||||
Right of use assets | 13.18 | 13.34 | 13.18 | 13.34 | 13.94 | 13.94 | |||||
Contract assets | 0.94 | 1.29 | 0.94 | 1.29 | 0.81 | 0.81 | |||||
Deferred tax assets | 1.00 | - | 0.98 | - | - | - | |||||
Total non-current assets | 105.10 | 107.04 | 103.68 | 106.16 | 106.80 | 105.85 | |||||
Current assets | 1.29 | 1.93 | 1.29 | 1.93 | 1.27 | 1.27 | |||||
Inventories | |||||||||||
Contract assets | 1.10 | 1.35 | 1.10 | 1.35 | 1.44 | 1.44 | |||||
Trade and other receivables | 17.83 | 17.14 | 16.68 | 9.74 | 15.97 | 14.82 | |||||
Amounts due from related companies | 0.21 | - | 0.21 | 0.49 | 0.64 | 1.69 | |||||
Current tax recoverable | - | 0.39 | 0.33 | 0.95 | 0.39 | 0.25 | |||||
Bank and cash balances | 20.18 | 11.62 | 1.09 | 0.87 | 22.68 | 1.58 | |||||
Total current assets | 40.61 | 32.43 | 20.70 | 15.33 | 42.39 | 21.05 | |||||
Total assets | 145.71 | 139.47 | 124.38 | 121.49 | 149.19 | 126.90 | |||||
Equity and liabilities | |||||||||||
Shareholder's equity | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 | |||||
Share capital | |||||||||||
Share premium | 2.35 | 2.35 | 2.35 | 2.35 | 2.35 | 2.35 | |||||
Retained earnings | 44.59 | 45.23 | 38.52 | 41.06 | 43.81 | 39.67 | |||||
Total equity | 47.34 | 47.98 | 41.27 | 43.81 | 46.56 | 42.42 | |||||
Non-current liabilities | - | 0.38 | - | 0.37 | 0.11 | 0.05 | |||||
Deferred tax liabilities | |||||||||||
Long-term portion of interest bearing loans | 3 | 28.83 | 21.70 | 28.83 | 21.70 | 26.44 | 26.44 | ||||
Long-term portion of lease liabilities | 4 | 0.42 | 1.07 | 0.42 | 1.07 | 0.53 | 0.53 | ||||
Total non-current liabilities | 29.25 | 23.15 | 29.25 | 23.14 | 27.08 | 27.02 | |||||
Current liabilities | 0.10 | - | 0.10 | - | 0.21 | 0.21 | |||||
Amounts due to related parties | |||||||||||
Bank overdraft | 10.77 | 8.07 | 10.77 | 8.07 | 10.99 | 10.99 | |||||
Current-term portion of interest bearing loans | 3 | 11.79 | 18.40 | 11.79 | 18.40 | 13.78 | 13.78 | ||||
Trade and other payables | 31.44 | 30.66 | 30.49 | 27.23 | 33.00 | 31.07 | |||||
Amounts payable to owners of e-money | 13.71 | 10.37 | - | - | 16.16 | - | |||||
Current portion of lease liabilities | 4 | 0.71 | 0.84 | 0.71 | 0.84 | 1.41 | 1.41 | ||||
Current tax payable | 0.60 | - | - | - | - | - | |||||
Total current liabilities | 69.12 | 68.34 | 53.86 | 54.54 | 75.55 | 57.46 | |||||
Total liabilities | 98.37 | 91.53 | 83.11 | 77.68 | 102.63 | 84.48 | |||||
Total equity and liabilities | 145.71 | 139.47 | 124.38 | 121.49 | 149.19 | 126.90 |
Balance at 1 January 2022 | 0.40 | 2.35 | 46.57 | 49.32 |
Comprehensive loss for the period | - | - | (1.34) | (1.34) |
Balance at 30 June 2022 | 0.40 | 2.35 | 45.23 | 47.98 |
Company-unaudited | ||||
Balance at 1 January 2023 | 0.40 | 2.35 | 39.67 | Total |
42.42 | ||||
Comprehensive loss for the period | - | - | (1.15) | (1.15) |
Balance at 30 June 2023 | 0.40 | 2.35 | 38.52 | 41.27 |
Company-unaudited | ||||
Balance as at 1 January 2022 | 0.40 | 2.35 | 42.86 | 45.61 |
Comprehensive loss for the period | - | - | (1.80) | (1.80) |
Balance at 30 June 2022 | 0.40 | 2.35 | 41.06 | 43.81 |
Group-audited | ||||
Balance at 1 January 2022 | 0.40 | 2.35 | 46.57 | 49.32 |
Comprehensive loss for the period | - | - | (1.76) | (1.76) |
Dividend declared (MK0.43 per share) | - | - | (1.00) | (1.00) |
Balance at 31 December 2022 | 0.40 | 2.35 | 43.81 | 46.56 |
Company-audited | ||||
Balance at 1 January 2022 | 0.40 | 2.35 | 42.86 | 45.61 |
Comprehensive loss for the year | - | - | (2.19) | (2.19) |
Dividend declared (MK0.43 per share) | - | - | (1.00) | (1.00) |
Balance at 31 December 2022 | 0.40 | 2.35 | 39.67 | 42.42 |
SUMMARY STATEMENTS OF CASH FLOWS
In billions of Malawi Kwacha
Group | Group | Company | Company | Company | Company | ||
unaudited | unaudited | unaudited | unaudited | audited | audited | ||
Six months | Six months | Six months | Six months year ended year ended | ||||
ended | ended | ended | ended 31-Dec-2231-Dec-22 | ||||
30-Jun-23 | 30-Jun-22 | 30-Jun-23 | 30-Jun-22 | ||||
Cash flows from operating activities | Notes | ||||||
Cash generated from operations | 10.77 | 11.47 | 11.89 | 14.61 | 36.73 | 27.82 | |
Interest received | 0.07 | 0.06 | 0.04 | 0.04 | 0.12 | 0.07 | |
Interest paid | (5.10) | (3.05) | (5.10) | (3.05) | (7.60) | (7.60) | |
Current tax paid | (0.08) | (1.52) | (0.08) | (1.16) | (2.49) | (1.16) | |
Net cash generated from operations | 5.66 | 6.96 | 6.75 | 10.44 | 26.76 | 19.13 | |
Investing activities | |||||||
Purchase of property, plant and equipment | 5 | (5.39) | (8.83) | (4.47) | (8.83) | (15.14) | (14.46) |
Purchase of intangible assets | 5 | (1.61) | (0.48) | (1.61) | (0.48) | (3.14) | (3.06) |
Proceeds from sale of property, plant and equipment | - | - | - | - | 0.07 | 0.07 | |
Net cash used in investing activities | (7.00) | (9.31) | (6.08) | (9.31) | (18.21) | (17.45) | |
Financing activities | |||||||
Divinded paid to owners of the company | - | (1.51) | - | (1.51) | (2.51) | (2.51) | |
Proceeds from loans | 3 | 8.97 | 7.86 | 8.97 | 7.86 | 18.89 | 18.89 |
Repayment of loans | 3 | (8.57) | (5.50) | (8.57) | (5.50) | (17.03) | (17.03) |
Lease liability payments | 4 | (1.34) | (3.54) | (1.34) | (3.54) | (4.80) | (4.80) |
Net cash used in financing activities | (0.94) | (2.69) | (0.94) | (2.69) | (5.45) | (5.45) | |
Net (decrease)/increase in cash and cash equivalents | (2.28) | (5.04) | (0.27) | (1.56) | 3.10 | (3.77) | |
Cash and cash equivalents at the beginning of the period | 11.69 | 8.59 | (9.41) | (5.64) | 8.59 | (5.64) | |
Cash and cash equivalents at the end of the year | 9.41 | 3.55 | (9.68) | (7.20) | 11.69 | (9.41) | |
Summarised unaudited consolidated and separate financial
Statements for the six months ended 30 June 2023
NOTES TO THE SUMMARY FINANCIAL STATEMENTS | NOTES TO THE SUMMARY FINANCIAL STATEMENTS (continued) | ||||||||||||
In billions of Malawi Kwacha | In billions of Malawi Kwacha | ||||||||||||
Standard Bank plc revolving credit facility | |||||||||||||
Group | Group | Company | Conpany | Group | Company | ||||||||
unaudited | unaudited | unaudited | unaudited | audited | audited | TNM entered into a revolving credit facility with Standard Bank plc of up to MWK 24 billion or the Malawi Kwacha equivalent | |||||||
as at | as at | aas at | as at | as at | as at | ||||||||
30-Jun-2330-Jun-22 | 30-Jun-23 | 30-Jun-22 | 31-Dec-22 | 31-Dec-22 | thereof. The purpose of the facility is to finance or refinance capital expenditure. The facility has a tenor of 60 months and | ||||||||
1. Capital commitments | 5.20 | 11.98 | 5.20 | 11.98 | 12.32 | 12.32 | attracts interest at a rate of Standard Bank Malawi plc reference rate plus 1.9% effectively 22.9%. TNM has covenanted to | ||||||
Authorised and contracted for | maintain a USD denominated account with Standard Bank plc for the lifetime of the facility and to channel all its USD | ||||||||||||
Authorised and not contracted for | 7.40 | 20.19 | 7.40 | 20.19 | 14.65 | 14.65 | |||||||
receivables to the said account. | |||||||||||||
The capital expenditure will be financed from internally generated resources and existing facilities | 4.Lease liabilities | ||||||||||||
Group | Group | Company | Company | Group | Company | ||||||||
2. Contingent liabilities | unaudited | unaudited | unaudited | unaudited | audited | audited | |||||||
as at | as at | as at | as at | as at | as at | ||||||||
Legal claims | 3.50 | 0.35 | 3.30 | 0.35 | 0.86 | 0.86 | 30-Jun-23 | 30-Jun-22 | 30-Jun-23 | 30-Jun-22 | 31-Dec-2231-Dec-22 | ||
Lease liabilities | 1.13 | 1.91 | 1.13 | 1.91 | 1.94 | 1.94 |
3. Loans and borrowings
Old Mutual | Standard | Total | |||
Group and Company-unaudited | Investment | Bank | |||
Group Limited | revolving | ||||
Commercial Paper | credit facility | ||||
Opening balance - 1 January 2023 | 17.00 | 23.22 | 40.22 | ||
Additions | - | 8.97 | 8.97 | ||
Interest charge | 1.78 | 1.67 | 3.45 | ||
Capital repayments | - | (8.57) | (8.57) | ||
Interest paid | (1.78) | (1.67) | (3.45) | ||
Balance as at 30 June 2023 | 17.00 | 23.62 | 40.62 | ||
Long term portion of loans | 17.00 | 11.83 | 28.83 | ||
Current portion of loans | - | 11.79 | 11.79 | ||
17.00 | 23.62 | 40.62 |
Old Mutual | NICO Asset | Standard Total | ||||
Group and Company-unaudited | Investment | Managers | Bank | |||
Group Limited | Commercial Paper | revolving | ||||
Commercial Paper | credit facility | |||||
Opening balance - 1 January 2022 | 17.68 | 5.19 | 14.84 | 37.71 | ||
Additions | - | - | 7.86 | 7.86 | ||
Interest charge | 1.38 | 0.37 | 1.25 | 3.00 | ||
Capital repayments | - | - | (5.50) | (5.50) | ||
Interest paid | (1.35) | (0.37) | (1.25) | (2.97) | ||
Balance as at 30 June 2022 | 17.71 | 5.19 | 17.20 | 40.10 | ||
Long term portion of loans | 17.00 | - | 4.70 | 21.70 | ||
Current portion of loans | 0.71 | 5.19 | 12.50 | 18.40 | ||
17.71 | 5.19 | 17.20 | 40.10 |
Long-term portion of lease liability | 0.42 | 1.07 | 0.42 | 1.07 | 0.53 | 0.53 | |
Short-term portion of lease liability | 0.71 | 0.84 | 0.71 | 0.84 | 1.41 | 1.41 | |
1.13 | 1.91 | 1.13 | 1.91 | 1.94 | 1.94 | ||
5.Capital expenditure | |||||||
Group | Group | Company | Company | Group | Company | ||
unaudited | unaudited | unaudited | unaudited | audited | audited | ||
as at | as at | as at | as at | as at | as at | ||
30-Jun-23 | 30-Jun-22 | 30-Jun-23 | 30-Jun-22 | 31-Dec-22 | 31-Dec-22 | ||
Acquisition of property, plant and equipment | 5.39 | 8.83 | 4.47 | 8.83 | 15.14 | 14.46 | |
Acquisition of intangible assets | 1.61 | 0.48 | 1.61 | 0.48 | 3.14 | 3.06 | |
7.00 | 9.31 | 6.08 | 9.31 | 18.28 | 17.52 | ||
6. Depreciation and amortisation | |||||||
Group | Group | Company | Company | Group | Company | ||
unaudited | unaudited | unaudited | unaudited | audited | audited | ||
Six months | Six months | Six months | Six months | year ended | year ended | ||
ended | ended | ended | ended | 31-Dec-22 | 31-Dec-22 | ||
Depreciation and amortisation | 30-Jun-23 | 30-Jun-22 | 30-Jun-23 | 30-Jun-22 | |||
10.22 | 7.65 | 9.09 | 7.47 | 16.33 | 15.90 |
Old Mutual | NICO Asset | Standard | Total | |||
Group and Company-audited | Investment | Managers | Bank | |||
Group Limited | Commercial Paper | revolving | ||||
Commercial Paper | credit facility | |||||
Opening balance - 1 January 2022 | 17.68 | 5.19 | 14.84 | 37.71 | ||
Additions | - | - | 18.89 | 18.89 | ||
Interest charge | 3.01 | 0.43 | 3.09 | 6.53 | ||
Capital repayments | (0.68) | (5.19) | (11.16) (17.03) | |||
Interest paid | (3.01) | (0.43) | (2.44) | (5.88) | ||
Balance as at 31 December 2022 | 17.00 | - | 23.22 | 40.22 | ||
Long term portion of loans | 17.00 | - | 9.44 | 26.44 | ||
Current portion of loans | - | - | 13.78 | 13.78 | ||
17.00 | - | 23.22 | 40.22 |
Old Mutual Investment Group Limited (OMIGL)
On 26 February 2015, the company secured commercial debt paper of MK5.0 billion. The arranger and administrator was Old Mutual Investment Group Limited (OMIGL). The commercial paper was for a period of 5 years with an option of early repayment in tranches of MK1.0 billion after the third year. The coupon rate was 364 Treasury bill rate plus 200 basis points. The loan was secured with a debenture ranking behind National Bank of Malawi Plc overdraft facility and First Capital Bank Plc overdraft facility debentures and ranking pari pasu with the NICO Asset Managers Limited commercial paper debenture. On 25 February 2020 the loan was rolled over for another 5 year period on the same terms.
In 2020, the company secured commercial debt paper of MK10.0 billion. The arranger and administrator is Old Mutual Investment Group Limited (OMIGL). The commercial paper is for a period of 5 years with an option of early repayment in tranches of MK1.0 billion after the third year. The coupon rate is 364 Treasury bill rate plus 175 basis points. The loan is secured with a debenture ranking behind National Bank of Malawi Plc overdraft facility and First Capital Bank Plc overdraft facility debentures and ranking pari pasu with the Old Mutual Investment Group commercial paper and NICO Asset Managers Limited commercial paper debentures.
In 2021, the company secured additional commercial paper of MK2.0 billion from Old Mutual Investment Group Limited for a period of 5 years with the same terms as the other existing Old Mutual Investment Group Limited commercial papers.
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TNM - Telekom Networks Malawi Limited published this content on 07 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 September 2023 09:44:03 UTC.