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BDC ends five-year strategy on P227 million profit

Publishing Date : 09 December, 2019

Author : ALFRED MASOKOLA

Botswana Development Corporation (BDC) which is government’s investment arm, has ended its five-year strategy (2014-2019) with P227 million operating profit in the final year of the strategy.


The Operating Profit of P277 million for the year ending 30th June 2019, represented a 40 percent Year-On-Year growth. BDC net worth grew by P700 million to a record P2.1 billion, the first time in 49 years of the corporation’s existence. "The Corporation’s overall financial performance for the year remained positive and the financial position remains strong with income and asset ratios in good condition,” Acting Managing Director Moatlhodi Lekaukau said in stakeholder and media engagement session on Thursday.  


“Liquidity and capital ratios also remain robust and supportive of the business drive to deliver on strategic goals. Interest income was the main contributor to overall positive performance reflecting a positive shift in asset structure from equity-based assets to more debt-based assets.” BDC total assets and net worth both experienced a 12 percent Year-On-Year growth owing to increase in investment assets.


The Group total assets showed a 16 percent Year-On-Year growth to record P4.8 billion, largely due to strong growth in the value of investment assets. During the past financial year, BDC disbursed P742 million to new project ventures, exceeding the P705 million target and concluding its first major international transaction in the process.  BDC sustained its investment-grade credit rating of Baa2 / Stable by Moody’s Investors Service during the period (reaffirmed in September 2019), becoming the first local company to achieve such a ranking.


“A key underpin of the issuer rating is the strong company solvency and liquidity position,” Moatlhodi said. Lekaukau, who is the organisation’s substantive Chief Investment Officer, revealed in a stakeholder and media engagement session this week that the five year strategy has been a success, and that BDC has been transformed. The five year strategy came into being at the beginning of April in 2014, following the appointment of Bashi Gaetsaloe as the new Managing Director of the then scandal ridden organisation.


Gaetsaloe has since left BDC, just few months shy of seeing his contract off at the institution. Over the 2014-2019 strategic period, BDC presented a number of achievements, chief among them returning BDC to profitability, with over P1 billion in cumulative profits. Under the strategic period, BDC grew net worth of the business by P700 million to a record P2.1 billion with a total Asset Base growth reaching a record P4.8 billion.


During the period BDC paid P90 million in dividends to the Government and transferred P285 million worth of listed stock to the public while actively participating in the P1 billion note programme strategic development of local capital markets. BDC transferred businesses and assets worth P340 million to local companies and citizens. During the five year period, a total of P1.2 billion was disbursed towards new projects and created 1700 new jobs.


Lekaukau also indicated that the quasi-government organisation preserved over 5,000 jobs across Group of companies. “We are confident to remain profitable into the next financial year where growth will largely be driven by enhancing our portfolio to generate higher returns,” he said.  “BDC will continue to explore both the local and international markets to facilitate our requisite long-term funding requirements and strategic targets to position Botswana’s standing as an investment destination of choice.”

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