Except for telecommunication counters, Malawi Stock Exchange (MSE)-listed firms are poised for a good start in the first half (H1) of the year, published trading statements show.
In compliance with the listing requirements of the 16-counter MSE, a listed company is required to publish a trading statement as soon as there is a reasonable degree of certainty that the financial statements will differ by at least 20 percent from the previous corresponding period.
Of the 10 published statements, TNM plc is expected to have its profit after-tax decline by 130 percent while Airtel Malawi plc projects its profit after-tax to drop by between 20 and 25 percent, largely due to foreign exchange losses occasioned by the recent 25 percent devaluation of the kwacha.
However, profit after-tax for National Investment Trust plc is expected to increase by 22 percent, FMB Capital Holdings (FMBCH) plc by 70 percent, Standard Bank Malawi plc by 25 percent, Icon Properties plc by 20 percent, Nico Holdings plc by 35 percent, National Bank of Malawi plc by 30 percent, Sunbird Tourism plc by 150 percent and FDH Bank plc by 20 percent.
In its published trading statement, FMBCH plc group managing director Jaco Viljoen said the forecast for the review period is expected to give rise to a 45 percent increase in returns attributable to the shareholders.
Reads the statement in part: “While performance in the first half of the year has been strong and we anticipate this performance to continue into the second half of the year, stakeholders should be aware of current and emerging macroeconomic headwinds across FMBCH’s geographies which may adversely affect FMBCH’s operating subsidiaries’ performance in the second half of 2022.”
In an interview on Monday, Minority Shareholders Association of Malawi secretary general Frank Harawa said the mixed fortunes call for the need to diversify their portfolios, but they expect to earn more in dividends.
He said: “We understand that some of the companies not doing well have been negatively affected by exchange rate losses.
“As shareholders, we are hoping that those that are performing well will honour their dividend policies and that from the dividends earned, we will be cushioned from the harsh economic environment.”
In a written response yesterday, market analyst Cosmas Chigwe said profitability for most industries is going up largely because of the economic rebound from the Covid-19 pandemic.
But he said for telecom firms, most of their suppliers are paid in foreign currency, as such ,they have many foreign currency denominated accounts liabilities which hit back when the local currency is depreciating.
Chigwe said: “This year is essentially the first year that most companies’ results start reflecting the full effects of economies being back fully operational across all sectors and around the globe.
“The banking sector has been in a win-win as increased economic activity usually means more demand for financing.” In an earlier interview, MSE operations manager Kelline Kanyangala said through the dividend payouts, the local bourse is playing one of its key role of reducing income inequalities.
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