MPICO : FY2023 Financials

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023

AUDITED SUMMARY CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

SUMMARY CONSOLIDATED AND SEPARATE STATEMENTS OF COMPREHENSIVE INCOME

Rental income

Increase in fair value of investment properties

Other income

Dividend income from subsidiaries

Total income

Total operating expenses and finance costs

Profit before taxation

Taxation

Profit for the year

APPROPRIATION OF PROFIT FOR THE YEAR

Realised profits

Unrealised profits

Amount attributable to members of the parent company

Amount attributable to non-controlling interests

Number of shares used for calculation

Basic earnings per share (K)

• Realised (K)
• Unrealised (K)

SUMMARY CONSOLIDATED AND SEPARATE STATEMENTS OF FINANCIAL POSITION

EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY

Ordinary share capital

Realised reserves

Unrealised reserves

Share premium

		GROUP		COMPANY
	31-Dec-23	31-Dec-22		31-Dec-23			31-Dec-22
	K'000	K'000		K'000			K'000
6 882 542	6 841 041		2 590 041		2 468 693
8 932 121	6 690 900		3 014 582		2 428 500
1 532 388	1 027 878		1 830 126		1 183 365
	-	-		400 000		1 716 000
17 347 051	14 559 819		7 834 749			7 796 558
	(6 408 912)	(5 554 560)		(4 536 902)		(3 543 388)
	10 938 139	9 005 259		3 297 847			4 253 170
	(3 871 376)	(867 783)		(242 576)		(784 832)
	7 066 763	8 137 476		3 055 271			3 468 338
	947 031	1 089 817		259 523			1 600 247
4 521 781	4 636 627		2 795 748		1 868 091
	5 468 812	5 726 444		3 055 271			3 468 338
1 597 951	2 411 032		-		-
	7 066 763	8 137 476		3 055 271			3 468 338
2 298 047 460	2 298 047 460
2,38	2,49
0,41	0,47
1,97	2,02
		GROUP			COMPANY
	31-Dec-23	31-Dec-22		31-Dec-23			31-Dec-22
	K'000	K'000		K'000			K'000
114 902	114 902	114 902	114 902
6 350 314	5 906 364	9 456 389	9 699 948
42 165 340	37 643 559	20 836 541	18 040 792
8 626 938	8 626 938	8 626 938	8 626 938

SUMMARY CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWS

Cash flows from operating activities

Cash generated from operations

Dividend received

Interest received

Interest paid

Dividend paid

Dividend paid to non-controlling shareholders

Cash flows generated from operating activities

Taxation paid

Net cash (used in)/generated by operating activities

Cash flows from investing activities

Additions to plant and equipment (Costs)/proceeds on disposal of equipment Receipts from staff long-term loans

Net cash used in investing activities

Cash flows from financing activities

Repayment of borrowings

Net cash used in financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

		GROUP		COMPANY
	31-Dec-23	31-Dec-22	31-Dec-23		31-Dec-22
	K'000	K'000	K'000		K'000
1 668 526	4 103 207	570 270	1 244 935
	-	-	-	1 716 000
1 097 564	900 847	353 979	284 096
(778 603)	(720 909)	(226 583)	(167 126)
(503 082)	(758 359)	(503 082)	(758 359)
	-	(584 000)	-	-

1 484 405	2 940 786	194 584	2 319 546
(2 233 075)	(1 443 688)	(1 579 453)	(1 209 198)
(748 670)	1 497 098	(1 384 869)	1 110 348
(19 190)	(30 628)	(13 765)	(23 442)
(893)	2 223	(893)	2 223
13 776	13 324	13 776	13 324
(6 307)	(15 081)	(882)	(7 895)
(616 938)	(437 095)	-	-
(616 938)	(437 095)	-	-
(1 371 915)	1 044 922	(1 385 751)	1 102 453
379 654	(665 268)	75 324	(1 027 129)
(992 261)	379 654	(1 310 427)	75 324

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF PARENT COMPANY

Non-controlling interests

Total equity

LIABILITIES

Non-current liabilities

Current liabilities

Bank overdraft

Total liabilities

TOTAL EQUITY AND LIABILITIES

ASSETS

Non-current assets

Investment properties

Other assets

Total non-current assets

Current assets

Trade and other receivables

Promissory notes receivable

Cash and cash equivalents

Total current assets

TOTAL ASSETS

57 257 494	52 291 763	39 034 770	36 482 580
24 906 546	23 308 595	-	-
82 164 040	75 600 358	39 034 770	36 482 580
14 217 191	11 159 743	5 994 324	5 751 748
5 614 124	5 729 067	4 109 071	1 433 427
1 318 971	-	1 318 971	-
21 150 286	16 888 810	11 422 366	7 185 175
103 314 326	92 489 168	50 457 136	43 667 755
86 718 868	77 786 747	26 943 289	23 928 707
718 739	3 415 988	14 890 366	14 943 309
87 437 607	81 202 735	41 833 655	38 872 016
10 454 319	10 906 779	7 245 112	4 720 415
5 095 690	-	1 369 825	-
326 710	379 654	8 544	75 324
15 876 719	11 286 433	8 623 481	4 795 739
103 314 326	92 489 168	50 457 136	43 667 755

Basis of preparation

The summary consolidated and separate financial statements are prepared in order to meet the Malawi Stock Exchange Listing Requirements for summarised financial statements. The directors have considered the requirements of the Malawi Stock Exchange and believe that the summary statements of financial position, summary statements of comprehensive income, summary statements of changes in equity and summary statements of cash flows are sufficient to meet the requirements of the users of the summary consolidated and separate financial statements. The amounts in the summary consolidated and separate financial statements are prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards. The summary consolidated and separate financial statements have been derived from the Annual Consolidated and Separate Financial Statements which were approved by the Board of Directors on 06 March 2024 and are available on the company's website, www.mpicomw.com.

2023 FINANCIAL YEAR RESULTS PUBLICATION COMMENTARY Review of the results

The MPICO plc Board is pleased to announce the results of the Group for the year ended 31 December 2023.

Core operations registered strong growth, with profit before tax increasing by 21% to MK10.93 billion in 2023 from MK9.0 billion in 2022 due to improved income at MK17.35 billion (2022: MK14.56 billion). However, profit after tax decreased by 13% to MK7.07 billion in 2023 from MK8.14 billion in 2022 on account of a once-off deferred tax adjustment of MK2.6 billion following de-recognition of prior year deferred tax asset relating to investment properties. The Board determined that based on current taxable profits projections deferred tax asset relating to investment properties may not be fully utilised during the allowable period.

Rental income marginally increased by 1% to MK6.9 billion in 2023 from MK6.8 billion in 2022. Although the business achieved the planned rent reviews during the year, rental income growth year on year was limited by voids due to economic challenges. On the other hand, total operating expenditure for the year increased by 15% to MK6.41 billion in 2023 from MK5.55 billion in 2022 as efforts to manage expenses continued.

Government rental arrears decreased to MK3.5 billion as at 31 December 2023 from MK6.0 billion the same period in 2022 due to payments made by Government during the year. Further payment was received post year end leaving rental arrears at MK2.1 billion as at 29 February 2024.

Outlook*

INDEPENDENT AUDITOR'S REPORT ON THE SUMMARY CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS TO THE SHAREHOLDERS OF MPICO plc

Opinion

The summary consolidated and separate financial statements, which comprise the summary consolidated and separate statements of financial position as at 31 December 2023, and the summary consolidated and separate statements of comprehensive income, summary consolidated and separate statements of changes in equity, and summary consolidated and separate statements of cash flows for the year then ended, and the related notes, are derived from the audited consolidated and separate financial statements of MPICO plc for the year ended 31 December 2023.

In our opinion, the accompanying summary consolidated and separate financial statements are a fair summary of the audited consolidated and separate financial statements of MPICO plc, and on the basis described on the basis of preparation paragraph.

Summary consolidated and separate financial statements

The summary consolidated and separate financial statements do not contain all the disclosures required by the International Financial Reporting Standards. Reading the summary consolidated and separate financial statements and the auditor's report thereon, therefore, is not a substitute for reading the audited consolidated and separate financial statements and the auditor's report thereon. The summary consolidated and separate financial statements and the audited consolidated and separate financial statements do not reflect the effects of events that occurred subsequent to the date of our report on the audited consolidated and separate financial statements.

The audited consolidated and separate financial statements and our report thereon

We expressed an unmodified audit opinion on the audited consolidated and separate financial statements in our report dated 2 April 2024. That report also includes the communication of key audit matters. Key audit matters are those matters that in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements for the current year.

Directors Responsibility for the Summary Consolidated and Separate Financial Statements

Directors are responsible for the preparation of the summary consolidated and separate financial statements in accordance with the basis of preparation paragraph.

Auditor's Responsibility

Our responsibility is to express an opinion on whether the summary consolidated and separate financial

SUMMARY CONSOLIDATED AND SEPARATE STATEMENTS OF CHANGES IN EQUITY

At the beginning of the year

Realised profit for the year

Amount attributable to minority interests

Unrealised profit for the period

Dividend declared - Final 2021

Dividend declared - Interim 2022

Dividend declared - Final 2022

Dividend declared to minority interest

	GROUP	COMPANY
31-Dec-23	31-Dec-22	31-Dec-23	31-Dec-22
K'000	K'000	K'000	K'000
75 600 358	68 805 249	36 482 580	33 772 602
947 031	1 089 817	259 523	1 600 247
1 597 951	2 411 024	-	-
4 521 781	4 636 627	2 795 748	1 868 090
-	(436 631)	-	(436 631)
-	(321 728)	-	(321 728)
(503 081)	-	(503 081)	-
-	(584 000)	-	-
82 164 040	75 600 358	39 034 770	36 482 580

The Reserve Bank of Malawi (RBM) projects GDP growth of 3.8% in 2024 from 1.5% in 2023 subject to the performance of the agricultural season, foreign exchange availability and the International Monetary Fund's (IMF) Extended Credit Facility (ECF) Program. However, inflation outlook remained elevated due to potentially below-average maize harvest, and the second-round effects of currency re-alignment.

The Board will continue to monitor the economic developments and take appropriate actions to preserve value for all stakeholders.

Dividend

The Directors are recommending a final dividend amounting to MK873 million in respect of 2023 profits, representing 38 tambala per share. There was no interim dividend for 2023. The final and interim dividends in respect of 2022 profits were K503 million and K322 million, respectively making a total dividend of K825 million for 2022 representing 36 tambala per share. The Dividend will be paid after approval by the Annual General Meeting (AGM) to be held in June 2024.

By order of the Board.

Edmund Hami	Edith Jiya
DIRECTOR	CHAIRPERSON
* Unaudited

statements are a fair summary of the audited consolidated and separate financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing 810 (Revised) Engagements to Report on Summary Financial Statements.

Chartered Accountants

Christopher Kapenda

Partner

24 April 2024

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