Wesbank

BTCL profit exceeds projections

SHARE   |   Wednesday, 05 July 2017   |   By Kabelo Adamson
BTCL profit exceeds projections

Botswana Telecommunication Corporation Limited (BTCL) this week announced massive profits in its financial results for the year ended March 31 2017, sparking an upward movement in the company’s share price. Following a prolonged period of subdued activity, BTCL share price gained 10 Thebe Wednesday and a further two Thebe on Thursday to trade at 141 Thebe a share, 41 percent above its Initial Public Offering Price (IPO) of 100 Thebe per share. This came after the company announced growth in profits after posting huge losses in the previous year. A former state enterprise BTCL arrived on the Botswana Stock Exchange (BSE) in 2016 and thereafter posted massive losses which the then Managing Director, Paul Taylor said was due to P522 million impairments. It would now seem the company is back to profitability as shown by the profit margins and a significant growth in the dividend declared. A 11.09 Thebe final dividend has been declared by the board which is led by former FNBB CEO, Lorato Boakgomo-Ntakhwana.

This time around BTCL announced 164 percent in profit growth or P237.3 million from a loss of P370.8 million the year before. This is more than what the company had projected. The target profit for 2016 was P115 million. The revenue growth was driven by the fixed telephony which increased by four percent, contributing 32 percent to total revenues and thereby remaining a solid revenue base for BTCL. Despite the four percent marginal growth on fixed voice revenue, fixed customer base is said to be declining. Abel Bogatsu, General Manager Finance, said this is somehow not surprising as most people are now switching to mobile networks. The fixed telephony is, however, not facing threats of falling into oblivion as it is in most cases required in broadband connections and therefore expected to remain important though it is losing its relevancy. Mobile revenues are the leading contributor to the whole company revenues and this time around it added 37 percent after it went up by 5 percent. The company, which is now under the guidance of Anthony Masunga, says it is now repositioning itself to become a true private company.

Masunga said at the briefing that they are now moving into that position which will see the company focusing mainly on creating shareholder value. BTCL has already taken a big step by diluting its board of directors with independent non-executive directors to add to those previously appointed by the responsible minister prior to it being converted into a company limited by shares. By listing on the BSE, BTCL became the only listed telecommunications company and currently competes with two other unlisted operators. The three find themselves competing in a small market which according to Masunga has become saturated