Press Corporation plc profit up 14% to K12.6bn half year after-tax 

Malawi Stock Exchange (MSE)-listed conglomorate Press Corporation plc has posted a 14% increase in profits after tax for the first half of the year to K12.69 billion from K11.16 billion over the same period last year.

Press Corparation CEO George Patridge(C):  We have posted a 14 percent increase in profit after-tax in the half-year.-Photo by Govati Nyirenda.

In a statement announcing the half year financial results signed by newly appointed Chairman of the Board Randson Mwadiwa, Director Betty Mahuka, Group Chief Executive Officer Dr George Partridge and Group Financial Controller Elizabeth Mafeni, the listed conglomerate said the results were achieved in spite of uncertain political atmosphere and the impact of Covid-19 pandemic.

“These results were achieved in spite of a challenging operating environment orchestrated by political uncertainties and a tense atmosphere in the run up to the fresh presidential elections as well as the impact of the COVID-19 pandemic which has had a significant impact on the economy,” reads the statement in part.

On the segmental performances, Press Corporation plc hailed its financial services segment especially National Bank of Malawi (NBM) plc for satisfactory performance after registering a 16% increase in non-interest income and a 7% and 11% growth in customer deposits and the loan book respectively.

Press Corporation plc however cautioned that increase in non-performing loans in the midst of the Covid-19 pandemic poses a major risk.

The Malawi Stock Exchange (MSE) listed conglomerate explained that its telecommunications segment which includes mobile phone company TNM and fixed telephony and board band company Malawi Telecommunications Limited (MTL) registered a 24% decline in its profit after tax.

“The fixed line company continued to make losses, albeit, lower than same period last year. The mobile phone company registered a 29% decline on its net earnings. The general trend of reduction in voice usage and the mandatory order by the regulator to lower costs by 40% on all mobile money transactions could not be compensated by the revenues emanating from the increase in data usage,” reads part of the statement.

The energy segment comprising of ethanol manufacturing companies Press Cane Limited and Ethanol Company (EthCo) delivered excellent results and more than doubled its profit after tax.

“The upside was from a new product line of hand sanitizers in the wake of the COVID-19 pandemic, the production of which was supplemented by carry-over feedstock,” reads the statement in part.

In the consumer goods segment which comprise of retail chain Peoples Trading Centre (PTC) made a loss but ‘is expected to improve following a change in strategy to reduce the company’s footprint and streamline operations to improve efficiency and reposition the company as an upmarket brand’.

Press Corporation plc noted that The Foods Company Limited trading as ‘Maldeco’ could not meet planned revenues due to the impact of COVID-19 on the supply of feed.

“Business is expected to pick up as the pandemic situation improves. Likewise, the real estate business (Press Properties Limited) registered a decline in its net profit due to the impact of the pandemic on the business,” reads the statement in part.

On equity accounted businesses, joint ventures PUMA, a fuel distribution company and Macsteel, a steel processing and trading company and other associated companies, Limbe Leaf, a tobacco processing company and Castel, a bottling and brewing company, Open Connect Limited, a telecom fibre back bone infrastructure company, Press Corporation plc said it was impressed with the results of this segment.

“The segment delivered excellent results and the Group’s share of profit increased by 43%. The performance was driven by improved results in the brewing and bottling business which registered an 89% improvement in its profitability.”

“Both the fuel distribution and the steel manufacturing businesses registered a decline in their profit after tax on account of the impact of Covid-19. Similarly, the tobacco processing business reported lower revenues due to delays in shipping of its tobacco occasioned by the Withhold Release Order by the US government on Malawi tobacco which has since been lifted,” reads the statement in part.

The firm also said the economic outlook for Malawi appears promising following the successful fresh presidential elections, while the COVID-19 pandemic continues to present a significant downside risk to the economy adding that building on the strength of being reasonably diversified, the Group is positioned for continued satisfactory performance.

The Press Corporation plc resolved to pay an interim dividend amounting to MK721.20 million (2019: MK721.20) representing MK6.00 per share (2019:MK6.00 per share). The dividend will be paid on Friday, 26th October 2020 to members whose names appear on the register as at the close of business on 18th October 2020.

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