Despite lamenting the effects of drought and blackouts on its operations, Press Corporation Limited (PCL) has posted an after tax profit of K17.21 billion for the year ended December 2016.
The group’s profits are up from K12.24 billion realised in 2015, according to a statement accompanying a summary of PCL’s audited results for the year 2016.
The Malawi Stock Exchange listed company says in the statement that the performance was driven by increase in revenues aided by significant improvement in gross margins and reduction in finance charges.
However, the statement notes that demand for the group’s products and services in the past year was affected by drought.
“The effects of drought resulted in significant reduction in output, mainly food crops and therefore disposable incomes, affecting demand for the group products and services. Tobacco proceeds, the mainstay of the country export sector, were 18% lower compared to the previous cropping season,” reads the summary.
“Drought conditions also resulted in low water levels in Lake Malawi and Shire River, significantly impacting an already fragile hydro power generation infrastructure. The productive capacity of the group companies was consequently affected as alternative sources of power using diesel generators increased operating costs than would the case be otherwise,” adds the summary.
PCL group has also in the summary said that the central bank interest policy framework was unfavourable.
“The Reserve Bank of Malawi (RBM) maintained a tight monetary regime through a high interest rate policy framework, with a slight easing of the Policy Rate in the last month of 2016 by 3 percentage points from 27 % to 27 %.This was commensurately followed up by a reduction of commercial bank rates. The exchange rate was relatively stable and the average inflation rate went down to 20% from 24. 9% in 2015,” says the summary.
PCL group among others is composed of National Bank and Inde Bank in the banking sector, Telekom Networks Malawi (TNM), Malawi Telecommunications Limited (MTL) and newly formed telecommunication fibre optic backbone infrastructure company (OCL) in the telecommunication sector.
In the energy sector PCL owns ethanol manufacturing – Press Cane and ETHCO while in the consumer goods segment sector it owns People’s Trading Centre.