Property giant, MPICO has reported in its latest financial results that the government’s rental arrears have worsened in the year ended 31st December 2019 to K5.8 billion from K2.3 kwacha in 2018.
The financial results co-signed by Damien Kafoteka and Edith Jiya for Managing Director and board Chairperson respectively, however, show that the Malawi Stock Exchange-listed firm recorded a 12% profit increase to 7.6 billion kwacha during the year despite the piling of the arrears.
“The statement reads: “Profit after tax increased to MK7.6 billion in 2019 from MK6.8 billion in 2018, representing a year-on-year increase of 12%. Government rent arrears worsened to K5.8 billion from K2.3 billion in 2018 and continued to negatively impact the company’s operations.”
Most of MPICO’s office space is occupied by government departments with the ministry of Lands Housing and Urban Development is one of the departments relying on rented offices.
The ministry’s Principal Secretary Joseph Mwandidya had since confessed during an earlier meeting with the members of Parliamentary Committee on Legal Affairs that the ministry has huge rental arrears that it can’t manage to settle in a single fiscal year.
He disclosed corrupt practices that are going on at the ministry when he said “Let me say it without hiding, the Ministry of Lands is rotten. There is no need to hide it. There is too much corruption taking place and people have been duped through a syndicate which I am glad to say has been busted on land sales. There is more that we need to do about it.”
The property company has said in its financial statements that it has adaptive strategic plans to ensure that its stakeholders are provided with relevant property solutions and that shareholders continue to enjoy growth in the value of their investment.
On the other hand, the company is attributing its positive annual performance to a slight increase in rental income at MK6.6 billion which was mainly driven by recent rent reviews and decreasing total expenditure, according to the statements.
Meanwhile, the company sees a gloomy future as it anticipates that the rescheduling of presidential polls to this year is likely to exert pressure on the government budget which may affect its operations and fiscal commitments.
“Following the nullification of the May 2019 presidential elections, and the rescheduling of presidential polls to May 2020, we expect that there will be pressure on the government fiscal budget and which may affect its operations and fiscal commitments,”said the statement.
The Directors recommended a final dividend making a total dividend of MK574.5 million for the year at 25 tambala per share from MK517 million at 22.5 tambala per share.