By George Lumwira
Blantyre Hotels (BHL) plc is expecting up to K3.5 billion profit in first half (H1) after two years of loss-making as it recovers from finance charges incurred by its Lilongwe hotel construction project.
The anticipated profit for six months from January to June 2025, according to the company鈥檚 trading statement, is attributable to interest earned on proceeds of its rights issue offering it recently made to raise K62.4 billion capital for completion of the project.
This marks a new dawn for the Malawi Stock Exchange (MSE)-listed hospitality player which has been posting back-to-back losses since 2023 due to high financing costs of the said project, according to investment analysts.
鈥淏lantyre Hotels plc accordingly advises Stakeholders that its profit-after-tax for the half-year ending 30 June 2025 is expected to be within the range of K3.35 billion and and K3.51 billion. This represents an increase of between 529 percent and 549 percent from the previous corresponding period ended 30 June 2024 where the company reported a loss after tax of K781 million.
鈥淭his profit is mainly arising from interest earned on the proceeds of the rights issue offering earmarked for the Lilongwe Hotel project,鈥 reads the trading statement signed by company secretary Leonard Chisale.
The company, which posted a loss of K1.4 billion for the full 2024 financial year from a loss of K793 million in 2023 due to finance charges in relation to the said project, could be recovering now while benefiting from the investment it made through the rights issue, according to equity investment analyst Kondwani Makwakwa.
Makwakwa said: 鈥淲hat this means is that BHL is finally reaping the benefits of the capital it raised through the 2024 rights issue, which was strategically invested in completing the Lilongwe hotel.
鈥淭he shift from a K700 million loss in H1 last year to a projected profit of up to K3.51 billion shows that the investment is now generating returns and easing the burden of past finance costs.鈥
He has since said this profit turnaround reflects not just improved cash flows, but also a stronger balance sheet and operational recovery stressing that while the gain is largely driven by proceeds from invested funds, it lays a solid foundation for future earnings from core hotel operations.
鈥淭he Lilongwe property is expected to drive recurring revenue going forward, strengthening BHL鈥檚 long-term outlook. Overall, the company is moving from survival mode to growth, with renewed investor confidence,鈥 Makwakwa said.
In a separate interview, stock market investor and chairperson for Minority Shareholders of Listed Companies in the Central Region Purity Chitalo described the BHL profit projection as inspiring to stakeholders, considering its record of performance challenges in the past although the Lilongwe hotel project would take time to have significant impact to shareholders.
鈥淭he rights issue has definitely strengthened its financial position especially towards the completion of the Lilongwe project which will boost its revenue going forward.
鈥淭hose who purchased BHL shares will be very delighted with this profit projection and future prospects for continued business profitability should macro-economic and other factors remain favourable,鈥 he said.
Since the raising of the K62.5 billion through rights issue in December 2024, BHL shares have rarely traded on stock market leaving the share price unchanged at K14.55 per share, a situation analysts say points to investors鈥 confidence on long-term gains based on its 180-bed golf estate hotel project.
In an earlier interview, MSE chief operations officer Kelline Kondowe said the holding of the shares could be attributed to several factors, including that the new shareholders want to 鈥渨ait and see鈥 how the company progresses.
鈥淭he most significant could be that most of the shareholders are new; hence, looking at long-term rather than short-term. As such, they are holding on to their investment, which is a demonstration of the trust they have in the company and our stock market.鈥
After the rights issue, the public now own 31.57 percent, Nico Life Insurance Company has 31.06 percent, Africap LLC owns 22.15 percent while Nico Holdings plc has a 15.22 percent stake.
After the rights issue, Nico Holdings plc replaced Press Trust as one of the non-public shareholders while members of the public shareholding more than doubled from just below 10 percent.