Considers additional investments locally
CA revenues grow by 8.7% in Botswana
Group wary of deep recession in Namibia
BAKANG TIRO
editors@thepatriot.co.bw
Diverse Southern African spread Fast Moving Consumer Goods (FMCG) distribution group CA Sales Holdings defeated Covid-19 odds with striking financial performance and is buoyant about Botswana.
The Botswana Stock Exchange (BSE) listed giant regional logistics company has recorded a very impressive solid growth seeing its revenue growing by 11.2% despite the Covid-19 challenges.
The Group Chief Executive Officer (CEO) Duncan Lewis has said that despite the contraction in Botswana’s economy as result of Covid-19, the market has still remained resilient with a lot of promise. He said the company is optimistic about Botswana and will continue to invest on the market.
“The local economy contracted in 2020 due to the impact of Covid-19 and notwithstanding the foreign exchange loss, and the ban on liquor and the cigarettes sales, for the significant part of the year we were able to grow revenue by 8.7% and generate reasonable profits across the six local operations,” said Lewis on the CEO review; as captured on the Group’s 2020 annual report.
In addition, he said they were also able to increase their market share and add new clients during the most challenging period of Covid-19, which has contributed to these results. Lewis said domestic demand is set to gradually recover and global demand which is expected to grow in developed markets should bolster the mining sector, particularly key diamonds exports.
According to the CEO of BSE listed diversified FMCG distributor, protracted health crisis is a key downside risk, however, analysts (Focus Economics) project the economy to grow 4.2% in 2021.
Lewis also indicated that the economy of the other key market and regional trade player being South Africa contracted by almost 7% in 2020 and by large because of lockdowns due to Covid-19.
“Our South African operations were fortunately declared an essential service during this period, and we were able to continue trading and were able to grow revenue by a modest 3.1%.EBIT, however, grew by 37%. This is by and large through efficiency gains through smarter resource deployment and because of acquisition (in 2019) returning to profitability after corrective action taken by management,” he said.
The recession in Namibia had continued throughout 2020, and its effects are felt throughout the retail sector but revenue across the three operations grew by 21.5% according to the CEO.
The revenue growth in Namibia, Lewis said, was enabled through the new business and is a pleasing result given the recessionary environment in the much constrained Namibian market.
Frans Reichert, Group Chief Financial Officer, said revenue increased by 11.2% to over R7.9 billion from R7.1 billion, despite trading restrictions, supply constraints and sporadic, unpredictable buying patterns from end consumers triggered by uncertainty during the coronavirus pandemic.
“The additional supplier contracts from the major multinational brand owners awarded to our subsidiaries in the latter part of the prior year, assisted in the revenue growth. Due to shifts in the shopper product mix, with alcoholic products not being sold for a substantial portion of the year, gross profit only increased with 6.2% on the prior year to R1.1 billion,” said CFO Reichert.
Reichert said Net profit after taxation of R230.6 million showed 10.7% growth on the prior year.
In addition, Reichert said the Group Finance costs decreased by 27% compared to the prior year partly due to the reduction in the interest rates in all the territories as well as the impact of the reduced value of the bond on the properties in Botswana due to the monthly down-payments.