BDC withstands 2021 volatility

Accrued P257m in revenue, 14% up

BDC’s net worth stood at P1.2 billion

Balance sheet also strong at P4.3 billion

BAKANG TIRO

editors@thepatriot.co.bw

The government’s investment arm, Botswana Development Corporation (BDC) has registered revenue of P257 million for the year ended 30 June, representing a 14 percent increase from the previous year.

According to Chief Executive Officer Cross Kgosidiile’s led BDC, the positive performance is a result of increased dividends mainly rising from managed cash flows at subsidiary level.

“The performance, however, underscores the adverse impacts the ongoing pandemic has had on the businesses and the economy, consequently affecting the corporation’s main revenues lines of interest income. Accounting standards requires an adjustment to be made to income recognised from assets in the distressed environments,” buttressed BDC.

Despite the headwinds, the company raised new funding to facilitate disbursements into new projects and included disbursements made by the company as a third strategic investment into an internationally recognised producer of convenience meal for consumers through Sub-Saharan Africa and global markets.

BDC emphasized that the transaction presents an opportunity to build a resilient supply chain and safeguard food security in Botswana; a milestone that Botswana is working to achieve.

“The current year disbursements were aligned to the strategic intent and steps were taken to identify opportunities that align to the Economic Recovery and Transformation Plan,” said the BDC.

Meanwhile, BDC said overall the company has recognized profit before taxation of P35 million. It said this resembled a much subdued position from the prior period, however it is a significant feat considering the COVID-19 impact on the business environment both local and globally.

“The impact of the pandemic further was noted in the valuation of investment assets as held by the company. Subdued markets resulted in negative price movements on the company’s listed assets. A total of P141 million was recognised as an unrealised fair value, the company’s balance sheet remain strong at P4.3 billion despite the impact of the ongoing pandemic,” BDC stressed.

BDC said despite a challenging operating environment the company’s net worth stood at P1.2 billion. On BDC Group, it said a number of group companies operate in industries negatively affected by Covid-19 and this had a key adverse impact in income lines such the dividend and rental income.

“Group operating income closed the year at P37 million, 89% lower than prior year P341 million mainly driven by significant impacts of the pandemic on the operating environment of the investee companies. Aside from impact on rentals and dividend income, valuation of investment properties on the year were noted to have a marginal decline compared to prior periods where fair value gains of P125 million were recorded,” said BDC, giving insight on the financial performance of BDC Group in 2021.

Both the Group and the Company were also negatively affected by adverse movements in foreign exchange rates, and notably was an unreleased loss of P24m from impacts of Dollar exchange rates movements.

In addition, BDC said similar to factors noted in relation to the company’s balance sheet above, BDC Group’s total assets on the other hand remained strong at just under P5 billion as at June 30 2021.