Government Debt Troubles Hamper Mpico plc: Operations Impacted by Unresolved K6 Billion Debt
In a recent development, Mpico plc, a prominent firm, has encountered operational difficulties due to the government’s failure to settle its outstanding debt of K6 billion. Joe Maere, a shareholder of Mpico, expressed his concerns about the negative impact of this debt on the company’s operations during the 50th annual general meeting held in Lilongwe. Maere emphasized that the government’s delay in paying rentals has directly affected the dividend and hindered the firm’s ability to utilize the substantial sum of idle money. He urged the directors to take prompt action in collecting the debt owed by the government.
According to a statement by Mpico’s chairperson, Edith Jiya, the government debt had risen from K4.8 billion in 2021 to K6 billion as of December 31, 2022. However, there have been some positive developments since then. Further engagements with the government resulted in the collection of promissory notes worth K2.9 billion on April 5, 2023. Additionally, the government has made commitments to release promissory notes amounting to K2.6 billion by May 31, 2023, as stated in the company’s official statement.
In response to these concerns, Taurai Banda, the spokesperson for the Ministry of Finance and Economic Affairs, assured that all audited arrears have been paid, and promissory notes have been issued to settle the outstanding debts. Banda emphasized that the ministry has duly addressed and settled all audited arrears, providing some reassurance regarding the government’s commitment to fulfilling its financial obligations.
Despite the debt-related challenges, Mpico plc managed to achieve a profit of K8.1 billion in 2022, representing a 27% year-on-year increase from K6.4 billion in 2021. This growth can be attributed to improved total income. Furthermore, the company witnessed a three percent increase in rental income, amounting to K6.8 billion in 2022, up from K6.6 billion in 2021. This increase resulted from rent reviews and higher occupancy levels. However, there was a marginal one percent rise in total operating expenditure, reaching K4.85 billion in 2022 compared to K4.79 billion in 2021.
Overall, Mpico plc’s operations have been significantly impacted by the government’s struggle to settle the K6 billion debt, leading to concerns among shareholders and a call for swift action to collect the outstanding amount. While positive steps have been taken to address the issue, the company continues to face financial challenges. Nonetheless, Mpico’s profitability has shown promising growth, driven by increased total income and rental revenue