Mpico Limited, the Malawi Stock Exchange (MSE)-listed property management firm, which has posted a 30 percent profit slump to K1.4 billion (about $1.5m) from K2 billion (about $5m) the year before, expects demand for office space to grow over the long-term.
The firm also expects real growth in the rental income next year. In the year ended December 2012, Mpico Limited’s rental income jumped nine percent to K1.2 billion (about $3m) from K1.1 billion (about $2.7m) the year before.
The year’s profit drop is in line with the cautionary statement the company earlier issued to its shareholders warning that profit is expected to decrease by 30 percent.
“This is a result of a significant write down on the costs incurred on the mall due to impairment,” said the statement accompanying results signed by board chairperson Dye Mawindo and one of the directors, Stewart Malata.
The firm is building a K10 billion (about $25m) worth Gateway Shopping Mall on an 18 000 square metre piece of land off the Mchinji Road in Lilongwe’s low density suburb of Area 47, whose construction deadline has been pushed further to March 2014 from October this year.
In the year, the firm’s income went up 24 percent to K4.2 billion (about $10.5m) from K3.4 billion (about $8.5m) and expenditure increased to K2.1 billion (about $5.2m) from K450 million (about $1.1m) the year before.
The company’s assets that include investment properties, receivables, funds at call and on deposit and cash and bank balances also increased to K20.3 billion (about $50.7m) from the previous year’s K16.9 billion (about $42.2m).
Mpico Limited managing director Gray Nthinda, in an earlier interview with Business News, said it has been difficult for the project in view of the foreign exchange problems, but said they managed to weather the storm.
The firm, with 1.1 billion shares on issue traded at K2.10 on Thursday and analysts expect the results to have an impact on the share price.