Conglomerate Press Corporation plc has registered a 24% profit after tax for the first half of the year despite operating in a challenging environment with severe foreign exchange scarcity and effects of the Covid-19 pandemic.
In a statement announcing the half year financial results ending 30 June 2022, Press Corporation plc said it has recorded a profit of K15.98 billion, up from K12.87 billion recorded at the same time the previous year representing 24% growth.
The statement signed by Press Corporation plc Board Chairman Randson Mwadiwa, Board Director Bettey Mahuka, Chief Finance and Administration Executive Moureen Mbeye and Acting Chief Executive Officer Lyton Chithambo also said the Board of Directors of the company resolved to pay an interim dividend amounting to K841.79 million (2021: K721.20 million) representing K7.00 per share (2021: K6.00 per share).
“The dividend will be paid on Friday, 28th October 2022 to shareholders whose names appear on the register as at the close of business on 14th October 2022,” reads the statement in part.
Press corporation plc notes in the statement that growth in profitability was driven by an 11 percent growth in revenue, improved gross profit margin by 4 percent and successful implementation of cost containment measures.
“Disposal of PTC has also contributed to the improved results as losses associated with this investment (2021: K2.3 billion) are no longer part of the Group results,” reads part of the statement.
On segmental performance, Press Corporation plc said in the financial segment, its subsidiary, National Bank of Malawi (NBM) plc posted a 78 percent growth in its profit after tax to K22.7 billion (2021: K12.8 billion) driven mainly by a 48 percent growth in net interest income and a 13 percent increase in trading income following increased level of deposits and a marked growth of the loan book of 34 percent and 31 percent respectively.
However, the telecommunications segment consisting of mobile phone company, TNM and fixed telephony and broadband company MTL registered a 168 percent decrease in profit after tax as both MTL and TNM registered losses during the reporting period.
“The losses were exacerbated by the devaluation of the local currency resulting in exchange losses of K2.2 billion for the period. The Group is confident that the segment will soon benefit from fresh strategies currently being implemented that seek to arrest the losses and reverse the segment’s performance. The search for equity investors in the fixed telephony business is continuing,” reads the statement in part.
The energy segment comprising PressCane and Ethanol Company Limited (Ethco)registered a 56 percent drop in its profitability from the prior period due to production start-up timing differences.
“In 2021, PressCane started production early compared to 2022 due to feedstock availability. Nevertheless, both companies are currently on track and it is expected that in the second half of the year, the overall performance will improve markedly as full production resumes and both companies are expected to meet their respective annual targets,” reads part of the statement.
“Press Properties Ltd registered a profit after tax of K0.5 billion (2021: K0.4 billion). The Foods Company on the other hand made a loss of K1.2 billion (2021: K1.1 billion) due to persistent interruption in the fish feeding regime resulting from supply chain challenges brought about by the impact of the COVID-19 pandemic and increased finance cost.”
“The performance is expected to improve from the third quarter of the year as the company starts harvesting fish from its aquaculture operations. The critical project of establishing a floating feed mill is about to start. The feed mill will complement the aquaculture expansion program which is also currently being implemented,” reads the statement in part adding that the search for an equity investor in the Foods Company is on-going.
In joint ventures, PUMA delivered good performance when compared to the prior period because of increased volumes and expansion projects. Macsteel on the other hand was negatively impacted by high exchange losses following the devaluation of the Kwacha but the company has started making significant positive strides in the second half of the year.
On the associated companies, Press Corporation plc notes that Open Connect Limited continued reporting losses following strategic re-positioning i.e., product repricing to retain key customers and delay in commercialisation of key revenue generating projects but said the performance is expected to improve in the second half of the year following the commissioning of its flagship products.
“Results from tobacco processing and trading were affected by its seasonality and are expected to improve in the second half of the year. During the period, LifeCo Holdings performance grew significantly, and it surpassed the entire business volume underwritten in the whole of 2021,” reads the statement in part.
“The Group remains steadfast in delivering on its strategy despite operating in a very challenging environment. Scarcity of foreign exchange, the pressure on inflation and persistent power blackouts remain significant risks to Group performance.”
“The Group will continue implementing turnaround strategies in companies whose performance is unsatisfactory. Further investment opportunities are also being explored in various sectors to further diversify the Group and its portfolio mix in market presence. There has been significant progress in scoping for a 50MW solar power production project,” reads part of the statement.