Some listed firms expect good tidings

Some Malawi Stock Exchange (MSE)-listed companies expect their year-end profits to be above the previous year, a development that could signal that these companies have weathered the economic storm of 2016.

Three companies, the only listed telecommunications firm TNM plc and commercial bank FMB and hotel chain Sunbird Tourism Limited, have projected an increase in their profits for the 2016, according to published trading updates.

In terms of the listing requirements of the MSE, a listed company is required to publish a trading statement as soon as there is a reasonable degree of certainty that the financial results for the period to be reported upon next will differ by at least 20 percent from the financial results for the prior period.

The year just about to end has been characterised by high interest and inflation rates and the depreciating kwacha, which is a dent on companies’ performance.

In 2015, the companies had projected a challenging year largely due to what they called a hostile operating environment.

However, positive projections could be a sign of the economy is not as bad as it was the previous year, and that recovery is on the cards, according to a Blantyre-based investment advisory firm Alliance Capital Limited.

Last month, the Reserve Bank of Malawi (RBM) reduced the policy or bank rate by three percentage points to 24 percent from 27 percent, thanks to easing inflation, currently at 20.1 percent and exchange rate stability, attributed to the tight monetary stance.

In its published trading statement for the period ending December 31 2016, TNM said it expects to record a 20 percent jump above that of last  year, said company secretary Christina Mwansa.

In 2015, TNM posted a profit after tax of K5.4 billion and this means with the 20 percent project increase, the profit could go up to K5.5 billion.

FMBexpects a 40 percent increase in profit compared to that of last year, according to company secretary Oswald Mtokale.

In 2015, the company made a profit of K3.86 billion and this means that in 2016, based on the forecast, the company will likely record a profit of about K5.4 billion.

Sunbird has also indicated that its profit will likely jump by 25 percent over that of last year, according to a trading update signed by company secretary Maureen Kachingwe.

Last week, listed Illovo Sugar (Malawi) Limited posted a K5.1 billion in the six months ending September 30 2016 from K2.1 billion the prior period. n