Sluggish economy pulls BTC profits down

Botswana Telecommunications Corporation Limited’s (BTC) just released results are reflective of the slow-moving economy; posting a 25% decline in profit after tax.

“This is mainly attributable to an 8% decline in total revenue to P1,466 m (FY18:P1,588m), and a 28% increase in depreciation to P199m (FY18:P156m) due to an increase in investment on mobile and fixed networks. Operating costs were under control and declined by 4% to P693m (FY18:P723m). This resulted in a 5% decline in earnings before interest, taxation, depreciation and amortisation (EBITDA) to P349m (FY18:P368m),” said the company.

Giving the financial results overview on Monday, BTC Managing Director Anthony Masunga said the trading environment has been harsh for the business operations.

He said the unfavourable conditions led to a decline in spending in ICT across all business segments ranging from mobile, fixed up to the broadband services.

The overall decline in revenue is mainly attributable to harsh trading conditions which saw restrained customer spend, resulting in a 12% decline as well on the mobile business despite the introduction of new products and services.

Masunga said while BTC is still in transformation to turn into a full private company, it has outlined three phase strategic focus so as to drive sales increase.

The company’s 2018 strategic focus was to modernise telecommunication infrastructure, 2019 was to grow the mobile and broadband business segment, resulting in 4% increase of mobile subscribers in the past year.

“We are now focusing on long term sustainability of the business at large. It has been a difficult 12 months of slow economic progress with the entire telecommunications sector recognising suppressed revenues for the period due to reduced spending power of consumers,” observed Masunga.

As for 2020, he revealed that they will build into a fully digitalised organisation in 2020, and grow mobile and broadband business.

On the other hand despite revenue decline, Masunga said BTC still remains committed to investments of mega technological developments to improve service delivery and internet connectivity.

He singled out the recently unveiled state-of-art Data Centre dubbed ‘Sentlhaga’ located in Kgale, saying it is set to enhance robust digital transformation with some commercial banks already connected to the centre.

Abel Bogatsu, BTC General Manager Finance while giving financial results overview, noted that there has been a decline in cash flow from P483 m in the previous year to P352 m in 2019.

Bogatsu said the company experienced a stagnation of subscriber growth as well as incurring 8% decline in revenue from contracts with customers to P1, 448 m from P 1, 567 recorded in 2018 financial year 2018.

However, positivity was sustained in total costs (excluding tax), as it went down by 5% driven by 4% reduction in cost of sales emphasizing that the focus for 2019|20 financial year is to commercialise the significant investments made in networks (mobile and fixed).

The BTC Board has also approved a final dividend of 5.73 Thebe per share following an interim dividend of 3.53 Thebe per share, which the company declared and paid for in the interim results.