Mpico profit to dip 15%

Mpico Limited, the Malawi Stock Exchange (MSE)-listed property development and management company, has forecast that its profit for the year ended December 31 2011 will drop by 15 percent over the 2010 results.

The company attributed the anticipated drop in after-tax profit to a decrease in fair value—estimated value of all assets and liabilities—of existing properties.

But company secretary Cosmas Katulukira said operational profit for the year is expected to be better than the previous year’s results.

“This [the 2011 result] is based on draft unaudited results,” said Katulukira in a cautionary statement to the company’s shareholders.

In 2010, Mpico’s profit went up by 134.6 percent to K2.5 billion (about $14.9m) from just over K1 billion ($6m) the year before thanks to a 24.6 percent increase in rental income.

With the 15 percent drop in after tax-profit in 2011, this means that the company is expected to post about K2.1 billion ($12.5m) after-tax profit.

In 2010, the property management firm’s rental income surged to K1.01 billion (about $6.1m) from K874 million (about $5.2m) in 2009.

The company indicated that it expected continued real growth in rental income because demand for office space continues to grow.

The group, which is currently building a $40 million (K6.7 billion) shopping mall in Lilongwe’s leafy suburb of Area 47 called Gateway, gave an update on the progress of the multi-million kwacha project two weeks ago.

Mpico managing director Gray Nthinda said that foreign exchange shortages currently hitting Malawi have delayed the completion of the shopping mall pushing the deadline to March 2013.

Initially, the 18 000 square metres mall was expected to be completed by October 2012.

Nthinda said with the foreign exchange problems, it is difficult to operate, but that they are managing to weather the storm.

Mpico Limited listed on the MSE in 2007 after the Privatisation Commission (PC) recommended the disposal of Malawi Development Corporation (MDC) shares in Mpico by way of initial public offer (IPO)—the issuing of common stocks or shares to the public for the first time.

The group’s assets last year went up by 50 percent to K12.2 billion (about $73 million at current exchange rate) from K8.2 billion ($50 million) the year before.