Malawi Stock Exchange listed firm Malawi Property Investment Company (MPICO) has reported a sharp decrease in profit after tax from MK1.45 billion in 2014 to MK776 million last year.
The disclosure was made by MPICO acting board chairperson Edith Jiya during the company’s Annual General Meeting (AGM) held at MPICO Gateway Mall Conference Hall in Lilongwe last week.
Jiya, who presented the chairman’s statement following the retirement of former board chairman Dye Mawindo largely attributed the sharp decrease to interest borrowings on the MPICO Gateway Mall, which came operational this year.
According to financial statements presented to members during the AGM, MPICO obtained loans from FDH Bank, National Bank of Malawi and other international financial institutions to finance construction of the country’s biggest shopping mall.
The company’s debts presently stand at MK12 billion but Jiya said the company had put in place some measures to retire the debts including issuance of more shares. It is also expected that rental fees from the mall will significantly contribute to settling of the loans.
Despite the sharp decrease in profits, the company’s total income increased from MK4.5 billion to MK6 billion, representing a 35 percent increase.
The increase was attributed to the growth in rental income of 45 percent and growth in fair value adjustment of 32 percent.
However, it was highlighted in the chairman’s statement that rental collections from government, which reportedly owes the firm about MK3 billion remained a challenge.
Apparently, the five-year lease agreement between MPICO and the government expired on June 30, 2016 and several government Ministries, departments and agencies (MDAs) have been relocating to new premises.
Explaining the development in an interview, Jiya said MPICO was discussing with the government to rationalise the rental situation.
“We are operating in tough economic situations and most of our tenants, including government, which has been renting most of our facilities have been affected. When our tenants are facing problems, we are affected too.
“That is why we have engaged in mutual discussions with the government to see how best to handle the rental issue after the expiry of the agreement,” said Jiya, who insisted that MPICO was not chasing government from its buildings.
Mawindo bids farewell
Later in the evening, MPICO directors and top management gathered at Blue Ginger Restaurant in Lilongwe’s Area 10 when the company hosted a farewell dinner for its former Chairman Dye Mawindo.
Mawindo resigned from the MPICO board a couple of months ago after picking up a job as Chief executive officer for Millennium Challenge Account Malawi.
Speaking in an interview after the farewell dinner, Mawindo said he was leaving a happy man after improving the status of the company.
“When I came back five years ago, one of the challenges we had was to diversity the company’s portfolio and make sure we are present in other sectors. That was the reason we embarked on the Gateway Mall project, which was not an easy challenge.
“I am happy that dream has been fulfilled although there are still some gaps, which others will have to fulfil,” said Mawindo.
This is the second time for Mawindo to step down from the board after heading the board between 1987 to 1995 when he was general manager for the defunct Malawi Development Corporation (MDC), which then had the majority of shares in MPICO. He voluntarily resigned from the board when MDC ceased its operations.
MPICO Managing director Peter du Plessis said the company’s management would miss the services of Mawindo, who he said had greatly contributed to the company’s growth.
“Since I came three years ago, we have had a very good relationship with him and he has greatly contributed to the growth of business. He has been giving us good direction and I have learnt a lot from him,” said du Plessis, who singled out the Gateway Mall as one of the company’s major achievements during Mawindo’s reign.Follow and Subscribe Nyasa TV :