Conglomerate Press Corporation plc (PCL) has posted a K36.3 billion profit after tax for the year ending 31 December 2022, which is 19 percent lower compared to the K45.1 billion recorded in the prior year.
In a financial statement signed by PCL Board Chairman Randson Mwadiwa and Chief Executive Officer Ronald Mangani, the holding company said the prior year’s performance was enhanced by a profit realized from the disposal of a 20 percent stake in Castel Malawi Limited amounting to K9.6 billion.
“When this extraordinary item is excluded, the Group’s profit after tax grew by 2 percent over prior year,” reads the statement in part.
“In 2022, the Group achieved MK288.6 billion in revenue, up from MK249.1 billion recorded the previous year (2021), translating into a 16 percent growth” adds part of the statement.
PCL hailed National Bank of Malawi (NBM) plc, its subsidiary, for a strong performance after registering a profit increase of 40 percent from 2021.
However, the telecommunication businesses underperformed during the year under review largely due to the effects of high inflation, the devaluation of the local currency and delay in completing some revenue generating projects attributed to forex scarcity.
“As part of its turnaround strategy, the businesses will focus on both revenue growth strategies as well as cost containment initiatives.” reads the statement in part.
The ethanol producing companies, PressCane and Ethanol Company (EthCo) registered a 4 percent increase in turnover however, its profitability declined by 7 percent from the prior year’s profit.
“This was largely due to sluggish sales occasioned by the shortages of petrol and diesel on the local market, production machinery challenges and feedstock supply challenges. The companies are still operating below their installed capacity due to challenges in feedstock and effluent management. Treatment plants to enhance effluent management capabilities will be commissioned at both companies during 2023, and will result in the production of organic fertilizers and bio-gas,” reads part of the statement.
“The Property company, Press Properties Limited registered a 26 per cent increase in profit against the prior year profit. Moving forward, the company is expected to increase its footprint in the property development and management business segment.”
“The Foods Company Limited (TFCL) slowed down its production activities towards the end of the year. The search for an equity investor in the company is on-going,” reads the statement in part.
On equity accounted investments, PCL said that PUMA’s profit grew by 44 percent from prior year, notwithstanding the fuel supply challenges experienced, Limbe Leaf by 5.5 per cent, LifeCo, by 165 per cent while Macsteel experienced a 66 percent reduction mainly due to foreign exchange shortages, as the business primarily relies on imports for its materials.
“At company level, PCL made a profit after tax of MK11.4 billion, which was 476 per cent above prior year on account of a drop in finance costs by 94 per cent, reduced overheads by 15 per cent and increased dividend received by 32 per cent,” reads the statement in part.
Looking forward, PCL said the macroeconomic landscape remains uncertain as risks to the outlook are heavily skewed towards the downside.
“The Group will remain poised to actively manage the portfolio in the face of the current market dynamics, leveraging on its strong track record, diversified asset base, strong capabilities, and synergistic benefits,” reads the statement in part.