- Accrues P240 million from rentals, grows by 15%
- BHC’s 2022 profit before tax jumps to P72 million
- No plans to adjust rental fees amid rising inflation
Botswana Housing Corporation (BHC) has defeated the Covid-19 pandemic odds on the back of strong performance with the corporation amassing P240 million in rental revenue.
The corporation Chief Financial Officer (CEO) Diratsagae Kgamanyane revealed that rentals revenue increased by 15% from P209 million to P240 million for the financial year ended 31st March 2022.
Kgamanyane said profit before income tax increased significantly from P2 million to P72 million. He said growth in surplus after tax from P1 million to P64 million was driven by rental revenue.
According to him, BHC recorded a significant improvement in surplus compared to the previous year.
“The corporation recorded an operating surplus of P61 million representing a significant increase against P6 million operating loss realised in the prior year. Profit before income tax increased significantly fromP2 million in the prior year to P72 million,” said the BHC CFO.
Kgamanyane said third party BHC business aspect is also growing significantly.
Third party projects are income diversification contract-based sourced from other government entities.
With regards to the revenue, Kgamanyane said the corporation recorded a total revenue of P702 million, showing an 8% decrease when compared to the P760 million recorded in 2021. Sales revenue, which is one of the major revenue streams, returned impressive margins, contributing to the overall growth in the gross margin. Costs went up by 7% reaching P258 million,” he added.
BHC Acting Chief Executive Officer (CEO) Pascaline Sefawe said BHC is realising growth from its 2017-2023 corporate strategy which has allowed the corporation to remain self-sustainable entity.
Sefawe indicated that BHC is generating its own money and therefore is not funded by the government.
“One of our key strategic priority area is project financing by diversifying our income through forging partnerships and collaboration to fund projects. We get funding from the local capital market from the Botswana Stock Exchange (BSE) listed bond worth of P2 billion to finance projects,” she said.
Moreover, she said to date P700 million has been raised to fund the BHC projects nationwide.
Sefawe said some of the housing projects planned by BHC are Block 7 flats for 336 units with 114 units (33%) to be reserved for the youth, Maun 100 units, Kazungula 212 units and Letlhakane 84 units too.
For his part, BHC Acting Board Chairman Moemedi Gabana underscored the importance of partnerships.
He said the corporation is leveraging on strategic partnerships with the private sector in housing delivery, adding that the value chains include material suppliers taking part to benefit too.
In addition, he said they have the Citizen Economic Empowerment Programme that supports local business community as BHC has aligned its procurement policies to that of Public Procurement Act.
“We are pushing for the citizen economic empowerment. For example, our SHHA projects are reserved for small local contractors in communities that houses are built in. Also, all of BHC maintenance with P30 million annual budget is done 100% by local-owned companies,” he said.
Commenting on the future outlook, Gabana stated that BHC is focusing on the low-middle income segment of the market in terms of housing putting emphasis on the affordable housing. He also said BHC will tap into use of innovation in delivery of sustainable and affordable housing.
Meanwhile, Gabana said BHC doesn’t have any plans to adjust rentals given the fact that inflation has pushed prices of important products higher, including cement which is a key component to BHC.
The company often adjusts rental prices in line with the market rates.