Malawi Stock Exchange (MSE)-listed firms are poised for a challenging second half (H2) due to the Covid-19 pandemic, which has already affected their profitability, an analysis of published financial statements shows.
In the first half of the year, profit after-tax for Mpico plc, a property management firm, declined by 30 percent to K2.5 billion from K3.6 billion in the corresponding period in 2019 while TNM plc saw its profit after-tax dropping by 29 percent to K4.8 billion from K7.4 billion.
While indicating that it has put in place appropriate responses to current or possible future developments, TNM plc said it expects the current economic challenges to continue in the foreseeable future.
On the other hand, Mpico plc, whose rental income and fair value gains declined by two percent and 41 percent to K3.08 billion and K1.77 billion, respectively, due to the impact of Covid-19, fears for the industry in the face of the pandemic.
Reads in part the firm’s statement: “The effect of the Covid-19 pandemic will have a major impact on the economy for some months to come.
“Consequently, the real estate industry is expected to record reduced revenues.”
National Bank of Malawi plc profitability was constant during the period with an after-tax profit of K9.1 billion.
On the other hand, FMB Capital Holdings (FMBCH) plc, which owns First Capital Bank, showed some resilience, registering a 181 percent increase in profit after-tax to $14.3 million (K10 billion) while its counterpart in the banking industry, NBS Bank plc also saw its profit after-tax growing to K3.7 billion from K2.1 billion recorded the during the same period last year.
FMBCH plc was cautions that the medium-term outlook, inclusive of the 2020 full year outlook, remains unpredictable given the uncertainties arising from the impacts of Covid-19 pandemic and macroeconomic instability in Zimbabwe, where it has 42 percent shareholding in Barclays Bank of Zimbabwe Limited.
Illovo Sugar (Malawi) plc has already painted a gloomy outlook, with profit after tax for the year ending August 31 2020 expected to be at least 65 percent lower than the previous corresponding period.
“This is mainly due to a decrease in domestic sugar sales revenues caused by an influx of illegally imported sugar and the resultant domestic price reset effected in December 2019,” said the firms’ company secretary Maureen Kachingwe.
Last week, MSE chief executive officer John Kamanga said the Covid-19 pandemic will have an impact on the local bourse although with the global economic recession, the capital market is becoming relevant in terms of recovery trajectory. n