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Press Corporation Limited profit up 10% to K12.89 billion

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By Mc Donald Chapalapata, contributor:

Conglomerate Press Corporation Limited (PCL) has posted a group after-tax-profit of K12.8 billion, up from K11.6 billion for the half year ended 31st July 2021, representing a 10 percent increase.

In a statement signed by PCL Board Chairperson Randson Mwadiwa and Group Chief Executive Officer George Partridge, the group says the performance was achieved against a background of a challenging operating environment characterised by severe forex shortages and the disruption due to Covid of the supply chain for most of its subsidiaries.

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The firm says its subsidiary in the financial sector, National Bank of Malawi, continued to be the main driver of its results and delivered satisfactory results driven by a 36 percent increase in net interest income and 51 percent growth in non-interest income.

The firm also has stakes in Malawi Stock Exchange-listed integrated and mobile phone services provider, TNM and fixed telephony and broad band company, Malawi Telecommunications Limited.

“The mobile phone company registered a 19 percent growth on its net earnings.

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“On the other hand, the fixed telephony company reported a 9 percent improvement in its results driven by improved gross margins and cost containment,” the statement reads.

In the energy segment comprising of ethanol manufacturing companies, Press Cane and Ethanol Company (EthCO), PCL says both companies were off season during the first quarter of the year.

“Press Cane, however, had an early start and registered an 85 percent growth in its earnings while Ethanol had a late start and registered an 85 percent decline in its earnings. Overall, both companies are on track and are expected to deliver planned results,” the statement reads.

However, PCL says Peoples Trading Centre in the consumer goods segment continued to make losses due to a myriad of operating challenges and informs that the search for an equity investor is continuing and some debts may have to be assumed by the group once an equity investor is identified.

PCL also says its subsidiary, the Foods Company, had a late start in fish harvests due to the impact of Covid on the company’s supply chain for imported feedstock but says performance is expected to improve in the second half of the year.

The conglomerate says in the equity accounted businesses segment, the results were below expectations as all companies, save for the fuel distribution business (PUMA Energy) and the newly operationalised LifeCo, reported losses.

Looking ahead, PCL says the current shortages in forex pose a big risk to achieving planned results, adding that the focus of the Group is on feasibility of new projects and to consolidate gains made in the existing restructured and streamlined portfolios.

Meanwhile, the firm has resolved to pay an interim dividend of K721.53 million (representing K6 per share).

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