Makes Profit of P26.6m
Due to the outbreak of the COVID-19 pandemic and the subsequent lockdowns in both Botswana and South Africa, coal trading business was only able to operate for 9 months out of the year. Prior to April 2020 the trading business was on track to grow by 15% year on year, however due to the effects of the pandemic we have instead seen a 15.6% decline in income from the business. Further to this, the current year gross profit margin improved to 19.25% from 8.5% in the previous year. This is due to the continuing operational improvements made as the company continues to build its competencies and skills in the trading business. The Directors believe the business unit continues to show improvement in its revenue generating capabilities.
Operating costs were reduced by 14% from the prior year. This is the result of the Board’s decision to implement cost cutting measures as a response to the COVID-19 pandemic. The Directors continue to ensure that the impact of COVID on the group operations is minimized as much as possible whilst prioritizing the jobs of employees.
During the period the Group was contractually due to receive in excess of P68 million in cash from its partners however these payments were defaulted upon with the effects of COVID 19 being provided as a reason. The Group is currently carrying out processes that will lead to it recovering owed amounts.
“We as a Group are pleased to have posted a profit for the first time in our 10-year history of operations. This is an indication to our shareholders that our strategy of investing in, developing and monetizing energy assets in Botswana is beginning to bear fruit. Was it not for the effects of COVID19 the results would have been significantly better as our liquidity position has been negatively impacted by the default of our partners and our inability to service our clients for 3 months due to the lock-down. We will continue to invest in sustainable energy assets with particular focus on growing the trading business, developing our fuels refinery and fast tracking our solar energy projects into operation. We will also continue to where possible support the communities where we operate in the fight against COVID-19.” – Mashale Phumaphi Group CEO