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Old Mutual profit up 19.7 percent

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Ronald Mangani

An audited financial statement for Malawi Stock Exchange (MSE) listed Old Mutual Malawi indicates that the company’s profit for the year 2021 rose by 19.7 percent to K23.7 billion from K19.8 billion recorded in the preceding year.

According to the statement, total revenues increased to K223 billion representing a 76 percent growth from the prior year’s K126.6 billion while investment income was recorded at K132.4 billion, a 153 percent growth from K52.3 billion in income in 2020.

However, the company’s liabilities also went up in the year, by 27 percent to K537.2 billion from K423.6 billion in 2020.

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“Profit after tax from the Life segment for 2021 increased by 22 percent from the profit reported in the prior year. The growth was due to increase in investment income and fees from assets under management. Profit after tax for the asset management business was 2 percent below the profit registered in the prior year due to increase in expenses. Profit after tax from the property management business increased by 48 percent due to the reduction of the tax expense compared to prior year.

“The increase in liabilities was driven by an increase in Life Assurance and Group Pension Fund Liabilities from K393 billion in 2020 to K507 billion in 2021, representing 29 percent increase. Equity grew by 23 percent in the year from K94.7 billion reported in 2020 to K116.4billion in 2021 driven by growth of profits in the current year,” the statement reads.

Old Mutual Chairperson Ronald Mangani, who signed the statement, said the macro-economic environment for 2021 remained challenging following the Covid triggered restricted trade for a second year in a row.

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He said despite the slow economic recovery in 2021, the MSE returned 40.05 percent, a strong price return compared to the 7.08 percent for the prior year, while money market yields were elevated largely due to pressure in the fiscal space.

“Economic growth prospects remain weak with significant downside risks from uncertain weather patterns and productivity inhibitors like insufficient power supply. The economy is projected to grow by 3 percent in 2022 which is a downward revision from the initial forecast of 4.0 percent mainly due to downside risks from erratic weather and insufficient and unstable power supply challenges exacerbated by the impact of Storm Ana,” Mangani said.

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