Five firms’ profits point to recovery from Covid
Firms’ soaring profits a good sign on recovery from pandemic, according to analysts.
What you need to know:
- The five largest public listed entities in Tanzania have given their investors something to smile about after posting huge profits last year, which analysts say are further proof that Tanzania is emerging from the Covid-19 doldrums
Dar es Salaam. The five largest public listed entities in Tanzania have given their investors something to smile about after posting huge profits last year, which analysts say are further proof that Tanzania is emerging from the Covid-19 doldrums.
Data shows that the net profits of NMB Bank Plc, CRDB Bank Plc, Tanzania Breweries Limited (TBL) Plc, Tanzania Cigarette Company (TCC) and Tanzania Portland Cement Company Limited (TPCC) – which trades as Twiga Cement – rose significantly in 2021.
Analysts say the rise is clear testimony that Tanzania’s economy is steadily recovering from the devastating impact of the global Covid-19 pandemic.
The five companies, along with Vodacom Tanzania, have the highest domestic market capitalisation at the Dar es Salaam Stock Exchange (DSE). Vodacom has not yet released its latest financial statement.
In total, the five companies registered Sh857.98 billion in net profits for the year 2021.
This was 49.17 percent higher than Sh575.15 billion that they made in net profits during the 2020.
Normally, Tanzania’s companies hold their Annual General Meetings (AGMs) during the period between April and June every year where shareholders approve, among others, dividends as recommended by the firms’ board of directors.
With more profits, investors could now be looking up to more cash in their pockets during the coming few days, analysts say.
“This being the period for dividend announcement, investors must definitely be happy because they will receive just what they had been expecting. They saw this coming after looking at the good trend in business in 2021,” said the capital markets manager at Vertex International Securities Limited, Mr Ahmed Nganya.
He said the move will improve activities at the DSE as investors’ demand for equities will rise, considering the decline in yields at the bond market.
A close analysis of the figures shows that both manufacturing firms and commercial banks were completely out of the Covid-19 woods in 2021.
NMB Bank went home with a net profit of Sh292.14 billion in 2021, up from Sh210.3 billion in 2020. CRDB Bank registered a net profit of Sh268.16 billion in 2021 from Sh165.18 billion in 2020.
TBL Plc’s shareholders will now decide on what to do with a 2021 net profit of Sh149.658 billion during the brewer’s next AGM. This was almost the same as what the maker of Kilimanjaro Premium Lager registered in 2019 when it went home with Sh150.21 billion in net profit. The beer maker’s 2021 profit was also a massive comeback from a reduced net profit of only Sh89 billion that it registered in 2020.
“Our performance in 2021 reinforces our confidence that our strong portfolio of brands and renovated commercial strategy can deliver consistent growth and long-term value creation, even in challenging years as the one we faced in 2021,” country director, Mr Jose Moran, said in the company’s recently released financial statement.
Like TBL Plc, Twiga Cement’s news was also good in 2021.
The company’s net profit – as depicted in its recently published financial statement – grew from Sh74.67 billion in 2020 to Sh88.48 billion in 2021.
