Botswana Telecommunications Corporation Limited has recorded a loss of over P300million in the 2015/16 financial year.
BTCL, the first parastatal to be privatised under the Botswana Privatisation Policy acknowledges that 2015/16 was a challenging year for the company performance-wise.
Despite the company delivering a steady set of results, registering 0.4 percent growth in revenue, it registered a loss of P371million due to asset impairment.
BTCL’s chairperson, Daphne Matlakala however explains that, “It is imperative to put the reported loss into perspective.
This is not operational loss; it is a loss resultant from an impairment charge. i.e. an adjustment of the value of the company’s asset base to align it to its value generating ability. At year end, the carrying value of the company’s assets was higher than its value generating ability.”
The company disclosed the need to make this adjustment in the prospectus; the adjustment was estimated at P306 million for the year, but the actual adjustment at year end was P522 million, resulting in a much higher than expected loss of P371 million compared to the projected loss of P128 million.
Excluding the impairment charge, the company registered a profit before tax of P54 million. The adjustment was necessary to position the company for profitability in the future because by making the adjustment now means future profits will not be hit by higher levels of depreciation or significant levels of impairments.
Despite the reported loss, the Board recommended a dividend of 5 thebe per share; representing a dividend yield of 5 percent on the company’s listing price of Pula 1.00, over 3 months since listing. Matlakala notes that, BTCL is able to pay dividends on the back of cash generated for the year 2015/16 and accumulated profits from previous years. She adds that, the company’s cash position is very strong, allowing for focused, revenue generating investment going forward.
Gov’t swiftly acts on BMC
Government has moved swiftly to place Botswana Meat Commission under the care of a management firm; the move is meant to put the Commission into shape both operationally and financially.
This was disclosed by Finance and Economic Development Minister, Dr Thapelo Matsheka, further stating the BMC is technically insolvent despite having received nearly P1billion as a bailout in recent times. The new management company will run BMC, which is based in Lobatse starting on the 2020/2021 financial year.
The finance minister made it crystal clear that, the move to appoint a caretaker firm for BMC was made to protect the interests of all stakeholders, including farmers. According to Matsheka, the Minister of Agriculture Development and Food Security, Dr Edwin Dikoloti will provide more details on the BMC changes in due course during his committee of supply speech. Government is also proceeding with the conversion of BMC to a company under the Companies Act following the approval of BMC Transition Bill and subsequent repeal of the old Act.
The repealing of the BMC Act has since eliminated the monopoly of the Commission when it comes to beef and cattle export. The repeal has also enabled government to establish a beef regulator which will be responsible for regulating the beef and the cattle sector. “Another aspect of the transition is the ultimate privatization of BMC.
The objective of the privatization of BMC is, among others, to engage the private sector in the ownership and management of the BMC to achieve operational efficiency and profitability, as well as reduce Government’s future financial commitments in the entity. This would be an important process in the transformation of the beef and cattle sector,” noted Matsheka. BMC which is 100 percent owned by government has been operating with losses for many years due to internal and external challenges such as poor supply and Foot and Mouth Disease(FMD).
BSE invite companies for CSD project
Botswana Stock Exchange (BSE) has intentions to implement a new Central Securities Depository (CSD) system by the second quarter of next year.
Authorities at the bourse have already put out a call for companies to perform a post migration data verification and quality assessment from the current depository system to a new depository system set to go live in the first half of 2020.“As part of the project, the BSE is to migrate master data and reference data from the current system to the new CSD system,” said BSE in a statement released this week.
According to BSE, the project will include comprehension of the BSE Data Migration Strategy and Plan and data mapping design and rules, review of the data migration ETL processes, data quality verification completeness, accuracy, consistency, definition and scope of data to migrate. In addition, BSE said it will migrate only active or open transactions in the current system to the new system. The scope of open transactions includes active or running corporate actions, active investor accounts, investor account balances above zero, active participants, active issuers and active instruments.
Meanwhile, BSE Chief Executive Officer, Thapelo Tsheole is on record citing that the new CSD system comes with functionalities such as securities borrowing and lending (SBL), management of the settlement guarantee fund, initial public offering (IPO) processing, e-voting for listed entities, repo management and online investor access.
Commenced in the first quarter of 2019, the project is also an integral element of the ongoing single CSD project pioneered by the Ministry of Finance and Economic Development, Non-Bank Financial Institutions Regulatory Authority and BSE.
The system is also expected to help increase the CSD system ratings by Thomas Murray, an assessment of which will be conducted once the system has been commissioned in early 2020.