By Saidi Winnes
Malawi’s largest publicly listed conglomerate Press Corporation Limited (PCL) says it is seeking equity investors to take over its stake in Malawi Telecommunications Limited (MTL).
“The PCL Group has decided to exit MTL and discussions with equity investors in the fixed telephony business are at an advanced stage,” says PCL in its summary of audited results for the year ended December 2021.
Meanwhile, the conglomerate has cast a dark shadow on Malawi’s economy doubting that the country will meet its projected 4.1% Gross Domestic Product (GDP) growth for 2022.
PCL says the invasion of Ukraine by Russia has adversely impacted on the commodity market of petroleum, fertilizer and food products.
In the statement co-signed by Chairman Randson Mwadiwa and Acting CEO Lyton Chithambo, the conglomerate, however, says despite the challenging operating environment, it is geared to continue restructuring the business portfolio so that the momentum gained in 2021 is translated into even better performance for 2022.
Mwadiwa and Chithambo say: “Although the operating environment remains challenging considering the key macroeconomic fundamentals such as inflation, foreign currency depreciation and interest rates, the Group will keep adapting,”.
“The focus of the Group is to expand its portfolio by investing in viable new projects, implementing turn-around strategies in its business and consolidating gains made in the existing restructured and streamlined portfolios.”
They say the Group has made a remarkable performance in 2021 during a tough operating environment when the country was still managing the effects of Covid-19 pandemic related challenges and forex scarcity.
The Group delivered an exceptional performance underlined by a 126% growth in profit after tax to K45.131 billion when compared to K19.974 billion achieved in 2020.
Among its subsidiaries, National Bank of Malawi performed strongly in 2021 as the Bank’s profit after tax grew by 48% to K33.3 billion (2020: K22.5 billion) driven by a K44% increase in net interest and investment income and a 45% growth in non interest income.
“This was a result of the growth in assets, mainly the loan book which grew by 20% and Government securities by 63%,” states Mwadiwa and Chithambo.
The telecommunications segment, which comprises mobile phone company; TNM, and the fixed telephony and broad band company; MTL, also performed strongly with the segment registering a 54% growth in its profit after tax of K8.3 billion (2020: K5.4 billion).
TNM registered a profitability growth of 24%, thus signalizing the potency of the various recovery initiatives put in place, while MTL on the other hand reported a significant improvement in its results driven by improved gross margins and cost containment, which resulted in a loss reduction of 46% from prior year. The PCL Group has decided to exit MTL and discussions with equity investors in the fixed telephony business are at an advanced stage.