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MPICO posts 3% profits in 2022 fiscal year

LILONGWE-(MaraviPost)-The country’s leading provider of property solutions MPICO Plc which is also a member of Old Mutual Group has made 3% profits in 2022 financial year.

This is despite unfavorable economic environment business captains are encountering in the country.

MPICO Plc board Chairperson Edith Jiya told the Annual General Meeting (AGM) on Friday, June 30, 2023 in the capital Lilongwe that rental income increased by 3% to MK6.8 billion in 2022 from MK6.6 billion in 2021.

Jiya disclosed that the increase is mainly due to rent reviews and improved occupancy levels adding that total operating expenditure for the year marginally increased by 1% to K4.85 billion from MK4.79 billion in 2021.

“Profit after tax increased to MK8.1 billion in 2022 from MK6.4 billion in 2021, representing a year-on-year increase of 27% due to improved total income.

“Government debt increased to MK6.0 billion as at 31 December 2022 (2021: MK4.8 billion) and continued to negatively impact on Group’s operations. After the reporting date, further engagements with Property Market in Malawi,” she said.

Jiya added, “The property market was adversely affected by rising inflation, with rental adjustments lagging inflation, while rising interest rates challenged new investments in the sector. Post the COVID-19 pandemic, trends such as flexible working conditions lingered, continuing to affect office Occupancy.

“The 25% devaluation in May 2022 as well as increased cost from unstable supply of power and fuel led to increased operating costs for property owners. Rental adjustments however, lagged in an attempt to retain occupancy levels. The residential property sector was impacted by weak macroeconomic conditions”.

Jiya assures, “The Board will continue to monitor economic developments and take necessary precautionary and mitigating measures”.

Echoing on the same, Old Mutual Investment Group Limited Managing Director Mark Mkwamba observes that macroeconomic environment for 2022 remained challenging due to persistent fuel, electricity, and foreign currency shortages, which were exacerbated by the negative effects of the Russia-Ukraine war and weather-related shocks.

Mkwamba however hopes for the better in the new financial year with restoration of power amid high inflation, forex shortages and among others

By the year’s end, the real Gross Domestic Product (GDP) growth figures had been revised downward from an initial 4.0% to 0.9%, which was also a slowdown from the estimated growth of 2.2% for 2021.

Headline inflation reached a six-year high in 2022, averaging 21%, due to a surge in food prices and a multiplier effect from the 25% currency devaluation implemented in May 2022.

The listed equity return of 36.70% was above average inflation for the year, after another strong price return of 40.05% in 2021.

Money market yields were generally below inflation due to the cautious monetary policy stance aimed at simultaneously reining in inflation and supporting economic recovery.

Economic Outlook

The economy is projected to grow by 2.5% in 2023 in real terms according to the International Monetary Fund (IMF), compared to an estimated real GDP growth of 0.9% 2022.

The impact of cyclone Freddy combined with energy and foreign exchange shortages, may result in lower than projected economic growth.

In addition, headline inflation is projected to remain high in 2023 due to the impact of cyclone Freddy on maize output and pressure on Fuel and utility prices.

Lloyd M’bwana
Lloyd M’bwana
I'm a Lilongwe University of Agriculture and Natural Resource (LUANAR)'s Environmental Science graduate (Malawi) and UK's ICM Journalism and Media studies scholar. Also University of Malawi (UNIMA) Library Science Scholar. I have been The Malawi Country Manager and duty editor for the Maravi Post since 2019. My duty editor’s job is to ensure that the news is covered properly, that it is delivered on time, and that it is created to the standards set out in the editorial guidelines of the Maravi Post.
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