The Board is pleased to report unaudited consolidated profit after tax of MK2.325 billion (2009: MK2.185 billion) for the six months ended 30th June 2010. This represents a 6% increase on same period last year.
The Financial Services Segment earned MK2.148 billion (2009: MK2.021 billion), an increase of 7%. During the period the bank experienced significant pressure on its treasury and international trade operations due to tight liquidity in both foreign and the local currency. Full year results might be adversely affected by possible impairment loss on the new head office building in compliance with International Accounting Standards.
The Food and Beverage segment(this excludes the Bottling and Brewing Group Limited which is covered below under "Investment in Associated Companies") made a loss of MK20 million (2009: MK18 million profit), a decrease of about 212%. This was due to losses incurred in the fish farming business. Maldeco fisheries' earnings were 6% up on last year. Construction of the new vessel, 'The Fish Eagle', was completed and the vessel is expected to be launched in November 2010. The vessel is expected to bring in significant additional revenue.
The fish farming division made a loss of MK58 million (2009: MK18 million loss) The division is just recovering from the effectsof non-availability of Fish Meal, a major ingredient of fish-feed, that severely affected fish growth in 2009. Fish harvests were put on hold for a greater part of the period under review to allow them to grow bigger. Harvests have since resumed and going forward the division's results are expected to improve.
The Retail and Consumer Goods segment earned MK423 million (2009: MK263 million), an increase of 61%. The oil distribution business had a good start with profits 77% up on same period last year. The Ethanol manufacturing businesses resumed production in May after the annualmaintenance shut-down period. Similarly, the steel processing and distribution business registered 187% growth in earnings and this was mainly becauseof the increased market share in newproducts.
The Telecommunication segment earned MK107 million (2009: MK56 million) an increase of 91%. During the period the fixed line operation continued to experience challenges in growing its revenues but reported better results than last year due to tight control of operating costs. The planned expansion projects are on course and the company successfully completed the second phase of the installation of the Fibre Optic Cable fromLilongwe to Mzuzu. The back loop from Mzuzu to Blantyre via the lakeshore is currently under construction. The project, which will cost about 24 million US Dollars, is expected to be completed by mid 2011.
The Mobile Telephone Company registered 19% growth in sales revenue during the period but margins were slightly lower than same period last year due to increased operating costs. The company successfully installed 30 base stations during the period, further expanding the network in terms of reach and capacity. During the period a new prepaid billing system was installed which among other things facilitates billing of pre-paid customers when roaming. Efforts to secure a technical partner are at an advanced stage. This should benefit customers in terms of better network management and reduced operating costs emanating from economies of scale.
Investments in associated companies earned MK1.35 million (2009: MK60.00 million), a decrease of 98%. This was because of the corporate tax provision made in the Tobacco Processing business relating to losses from its agronomy projects.
On the other hand, The Bottling and Brewing Group Limited continued to experience strong growth in sales and its profit during the period was 110% up on last year. Construction of a new Brewing and Bottling Plant commenced during the period. The plant which will cost about 13 million US Dollars, will double the production capacity of the company. Construction is expected to be completed by June 2011.
Dividend
Directors have proposed an interim dividend for the year 2010 of MK200 million representing K1.66 per share (2009: MK1.00 pershare), to be paid on 8th October 2010 to those shareholders registered in the books of the company as at the close of business on Friday24th September2010.
BY ORDER OF THE BOARD
Mr Dean Lungu | Chairman
Dr. M. A.P.Chikaonda | Group Chief Executive
Blantyre, 27 August 2010
Please click the link below to view the full Interim Financial Statement:
Interim Financial Statements for the Six Months Ended 30th June 2010
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