PCL H1 profit jumps 227% to K23 billion

Dual-listed conglomerate Press Corporation Limited (PCL) has posted a 227 percent increase in first half (H1) after-tax profit to K23 billion from last year’s K7 billion despite what it calls an “unsatisfactory operating environment”.

In the summary of unaudited financial results for the period ended June 30 2018,  PCL—listed on Malawi Stock Exchange (MSE) and London Stock Exchange (LSE) as a global depository receipt—said the results were boosted by the “deemed disposal of a 60 percent stake in Open Connect Limited [OCL] valued at K8.48 billion following the issuing of shares to an equity investor, Harith General Partners, which invests in infrastructure.

“Excluding the gain above, the group still registered a remarkable 107 percent growth. The strong performance was a result of the efficiency drive through cost reductions and increase in margins,” reads in part the statement jointly signed PCL board chairperson Patrick Khembo, group chief executive officer George Partridge, group financial controller Elizabeth Mafeni and chairperson of finance and audit committee Estelle Nuka.

PCL has interests in banking, telecommunications, energy, consumer goods, real estate and food segment, among others.

In the banking sector, PCL owns 51.5 percent stake in National Bank of Malawi plc and the financial results show that the MSE-listed bank registered a 17 percent growth in its loan book.

It said non-performing loans were within acceptable levels, but net earnings declined by 10 percent affected by lower-than-expected growth in the loan books required to offset the impact of the reduction in interest margins due to subdued business environment.

In the telecommunications sector where it has stakes in Malawi Telecommunications Limited and TNM plc, the mobile phone company (TNM) registered a 45 percent growth in net earnings pushed by 17 percent growth in service revenue while MTL registered a 235 percent increase in net profit boosted by reduction in costs and profit from sales of excess properties.

The energy sector, where PCL owns Presscane in Chikwawa and Ethanol Company (Ethco) in Nkhotakota, registered an 83 percent improvement in  its bottom line, largely driven by available feed stocks as both companies had carryover stock of both finished products and raw materials.

In the consumer goods segment, its retail chain stores under People’s brand registered a 43 percent reduction in losses.

But the fish farming business registered a loss due operational challenges, despite strong demand for the aqua tilapia while results in the real estate business registered a 78 percent improvement in bottom line.

PCL said poor results in bottling and brewing business at Castel Malawi were a result of what it called operational challenges. During the period, Castel had to recall some of its products from the market owing to some defects.

On MSE, PCL which has 120 million shares on issue, is trading at K772 per share. n