Some Malawi Stock Exchange (MSE)-listed firms expect year-end profits to be above the previous year despite a slowdown in business due to political uncertainty caused by the May 21 2019 Tripartite Elections.
Cautionary statements from Blantyre Hotels Limited (BHL), Standard Bank plc, Icon Properties plc and NBS Bank plc indicate that the firms expect profit rise in the year-ended December 31 2019.
BHL expects its profit after-tax for the period ending September 30 2019 to be approximately 35 percent higher than the previous corresponding period.
This could be a turnaround from its profit for the year ended September 2018, which went down by 31 percent to K352 million from K507 million the year before.
NBS Bank plc also expects its profit after-tax for the year ended December 31 2019 to be approximately 100 percent higher than the previous corresponding period. This will be a jump from K1.7 billion posted in the year before.
For Standard Bank plc, it expects its profit after-tax for the year ended December 31 2019 to be approximately 45 percent higher that the previous correspondingperiod. This will be a rise from last year’s K10.5 billion, which was a drop from K12 billion the previous year.
Icon Properties plc, which listed on MSE in January last year, expects its profit after-tax for the year ended December 31 2019 to be more than 200 percent higher than the previous two months period ended December 31 2018.
The property firm registered a K1.2 billion after-tax profit for the two months period ended December 31 2018 and a K2.52 billion after tax profit in the half-year period ended June 30 2019.
In an interview on Sunday, Bridgepath Capital Limited chief executive officer Emmanuel Chokani said despite the good performance in some counters, the Malawi All share Index (Masi)—the measure of local shares market performance— return was lower this year, which means the year was not good.
He said: “Domestic share index fared better at just under inflation. However, the foreign share index was the one that had poor performance, reflecting troubles with FMB Capital Holdings [FMBCH).
“My view is that the equity market has been overheating with some valuations peaking.
Chokani noted that NBS Bank’s turnaround strategy could be bearing fruits, with capital levels improving.
For Icon Properties, he said capital gains on properties were more positive.
Despite some firms indicating good tidings, FMBCH plc expects its profit for the year ended December 31 2019 to be 70 percent lower than what was achieved during the same period last year due to the macroeconomic environment in Zimbabwe and the impact of hyperinflation and devaluation of the local currency.
In 2018, the group recorded a marginal profit after tax increase of K10.77 billion from K10.06 billion in 2017.
MSE chief executive officer John Kamanga said they expect 2020 to be a more fruitful year.