BTCL projects return to profitability

SHARE   |   Tuesday, 05 July 2016   |   By Kabelo Adamson
BTCL General Manager Finance, Abel Bogatsu [L] with BTCL MD Paul Taylor at the announcement of the financial results in Gaborone on Thursday BTCL General Manager Finance, Abel Bogatsu [L] with BTCL MD Paul Taylor at the announcement of the financial results in Gaborone on Thursday

Botswana Telecommunications Corporation Limited (BTCL) has made a loss of P371 million against a projected P128 million profit for the year 2016. However company shareholders, who are estimated around 50,000 Botswana citizens and citizen owned companies, will walk away a dividend of 5 Thebe per share after the board led by Daphne Matlakala declared the amount to be paid to shareholders in August. Investors were made to purchase a minimum of 1000 shares which were sold at 100 Thebe each. The company dividend policy is said to be designed in such a way that 25 percent of profits are paid to the shareholders and the company officials could not explain in detail when the policy would be reviewed.

The company, which was listed on the Botswana Stock Exchange (BSE) in April, had projected to make in a profit of P128 million in the listing prospectus, but due to an impairment of P522 million and a once-off accelerated depreciation of P56 million, they achieved such loss. Presenting the company financials for the first time since listing, BTCL General Manager Finance, Abel Bogatsu said increased mobile costs of sales of P54 million relating to new business contracted towards year -nd have also contributed to the huge loss. Bogatsu said the company’s revenue growth has been marginal in the last two years, growing by two percent in 2015 and 0.4 percent in 2016.

In 2015 BTCL achieved revenue of P1.506 billion compared to P1.512 achieved during the year under review. The revenue is said to have been driven by sale of customer premises equipment contributing largely to BTCL top-line, registering growth of 62 percent. Revenue from mobile registered a growth of 12 percent. Low growth in revenue, according to Bogatsu, is due separation of assets between BTCL and Botswana Fibre Networks (BOFINET) and reduction in prices but he reckons revenue will increase by 4 percent in 2017. During the year, BTCL total costs amounted to P1.8 billion with an impairment adjustment of P522 million but Bogatsu promise that the impairment will be marginal.

The impairment is said to represent a write-down of some of property, plant and equipment due to technology changes and this resulted in the decline of assets from P2.404 billion to P1.949 billion. Going forward the company says it expects businesses to be profitable with fixed and wholesale revenue expected to stabilise following slowing down of huge price decrease. Mobile and broadband data services are expected to continue to anchor growth in the short-to-long term.

Projected P115m profit
Bogatsu said they see BTCL raking in profit of P115 million in the next financial year as they have lined up a number of projects that are aimed at improving customer service and enabling a high performance culture. The outgoing BTCL Managing Director, Paul Taylor - who leaves on the 19th of July this year – said they foresees the company bouncing back in the future in terms of being profitable. Taylor was appearing at the BTCL financial results for the first and last time as the board has chosen not to renew his contract. He said: “Our capital budget sees significant expenditure being made on driving out new higher speed mobile technologies, deploying a wider geographical footprint for terrestrial broadband, simplifying out IT systems and removing obsolescence from the network.” The combination of the above, he said, provide an excellent platform for the future.
“The brand is strong and BTCL will capitalise on this in the coming months by launching a new single brand family for all our products and services.”

Why let Taylor go?
On why they chose to let go of Taylor after he facilitated the listing of BTCL, Matlakala – the board chairperson – said Taylor has achieved his mandate that he was tasked with and therefore only fitting to let someone takeover. In a previous interview with this publication, Taylor said upon his appointment he was tasked with achieving three key things; improving the level of the organisation and its level of customer centricity; facilitating the assets separation; and privatisation. By close of business on Thursday, BTCL shares had lost 0.01 Thebe to trade at 109 Thebe per share.