The state developer swung to a P49.6 million profit after a punishing year, but the recovery leaned heavily on one-off asset disposals even as its core income fell by more than two-fifths.
Table 1 Botswana Housing Corporation, selected FY2026 results
| Key figure | FY2026 | FY2025 | Change |
| Revenue | P427.5m | P739.5m | -42% |
| Profit / (loss) after tax | P49.6m | (P104.6m) | +P154.2m |
| Operating profit / (loss) | P28.0m | (P116.8m) | +P144.8m |
| Total assets | P2.688bn | P2.613bn | +3% |
| Cash & equivalents | P354.5m | P467.5m | -24% |
| Housing inventories | P984.2m | P709.6m | +P274.6m |
After a year that tested the limits of its balance sheet, the Botswana Housing Corporation has returned to the black, posting a profit after tax of P49.6 million for the twelve months ended 31 March 2026 – a dramatic reversal from the P104.6 million loss it absorbed a year earlier.
The P154.2 million turnaround, announced by the Corporation’s Board on 14 October 2026, reads at first glance like a clean recovery story. Look closer, and a more complicated picture emerges: the state-owned developer earned its way back to profit not by selling more houses or collecting more rent, but by banking P95.6 million in gains from the sale of investment properties and by sharply curbing the impairment charges that had savaged its previous results.
Strip out those property-disposal gains, and the Corporation would have reported an operating loss of roughly P67.6 million. That single figure frames the central tension in the year’s accounts – a business that is profitable on paper while its underlying engine sputters.
A revenue line in retreat
The most arresting number in the results is not the return to profit but the scale of the revenue decline. Revenue and rental income tumbled by P312.0 million, or 42.2 percent, to P427.5 million, down from P739.5 million the year before.
The fall was broad-based. Rental income, the Corporation’s most dependable stream, slipped to P279.1 million from P392.2 million. Construction and management contract revenue – the lumpier, project-driven side of the business – collapsed to P141.7 million from P336.8 million. Outright housing sales, long a modest contributor, brought in just P6.7 million, down from P10.5 million.
By year’s end the revenue mix told its own story of dependence: rental income accounted for roughly 65 percent of the total, construction and management contracts about 33 percent, and housing sales a slender 2 percent. The simultaneous erosion of both the rental book and the contract pipeline underscores, in the Board’s own framing, the need to defend the rental portfolio and keep a reliable flow of construction and management work moving through the business.
Margins up, costs stubbornly high
Beneath the revenue drop ran a current of improving profitability. Gross profit came in at P309.9 million, down from P441.4 million, but the gross margin widened to 72.5 percent from 59.7 percent as the cost of sales fell faster than revenue – dropping 61 percent to P117.5 million from P298.1 million.
Operating expenses excluding impairment were trimmed to P361.5 million from P412.5 million. Repairs and maintenance, often the first lever a landlord pulls, fell to P78.0 million from P110.7 million. Employee benefit expenses held broadly steady at P170.6 million – a figure that includes P15.5 million capitalised to housing inventories – while depreciation and amortisation came to P31.6 million and other expenses to P81.3 million. The Corporation closed the year with 295 employees, down marginally from 299.
Yet the cost discipline could not keep pace with the shrinking top line. The cost-to-income ratio climbed to 84.6 percent from 55.8 percent – a blunt measure of how much ground revenue has ceded to a cost base that simply did not fall far enough or fast enough.
The impairment reversal
If any single line rescued the income statement, it was impairment. Net impairment expense fell to P16.9 million from a brutal P219.2 million a year earlier – a 92 percent reduction.
The movement was a composite. The Corporation recognised additional expected credit losses of P38.8 million on rental debtors and P4.8 million on professional fees, offset by a P31.6 million reversal on other receivables following collections and a reassessment of recoverability. A further P4.9 million write-down was taken on completed housing inventories in Francistown.
The Board was careful to note the accounting nuance: the receivables behind the reversal remain recognised in the ledger, and the reversal was neither a direct write-off nor a cash recovery. It is a judgement about future collectability, not money in the door.
Houses on the books, cash out the door
The balance sheet grew modestly, with total assets rising 3 percent to P2.688 billion and shareholders’ equity up 3 percent to P1.593 billion. But two movements beneath the headline figures deserve scrutiny.
The first is inventory. Housing inventories swelled by P274.6 million to P984.2 million, comprising P47.6 million of land for development, P706.5 million of housing under construction, and P230.0 million of completed houses after write-downs. At 36.6 percent of total assets, inventories now tie up a substantial share of the Corporation’s capital – money that remains locked up until projects are finished and sold, or converted into rental stock. The financial statements do not disclose how many housing units were actually delivered during the year.
The second is cash. Cash and cash equivalents declined to P354.5 million from P467.5 million. The Corporation bled P192.9 million in net operating cash outflows, partly cushioned by P133.1 million generated from investing activities – including P114.2 million in proceeds from investment property sales. The arithmetic is a reminder that, for the second time in these results, property disposals did the heavy lifting.
A quieter debt revolution
One of the year’s most consequential shifts drew little fanfare. Total borrowings edged down to P529.4 million from P546.2 million — a 3 percent decline that barely registers on its own. But the maturity profile underwent a transformation: current borrowings due within a year plunged to P32.8 million from P433.9 million, while long-term borrowings surged to P496.5 million from P112.3 million.
The effect was to ease near-term liquidity pressure markedly. The current ratio improved to 2.35 times from 1.34 times, and the debt-to-equity ratio eased to 33.2 percent from 35.4 percent – even as cash fell and inventories grew. In plain terms, the Corporation has bought itself time, pushing repayment obligations further out while it works to monetise the housing stock piling up on its books.
The share of profit from equity-accounted joint ventures contributed P24.6 million, up slightly from P23.7 million, with dividends received from those ventures amounting to P17.6 million. The Board noted that the share of profit and the dividends received are distinct measures and should not be treated as equivalent cash income.
The road ahead
Management’s going-concern assessment, covering the next twelve months, weighed financial performance, cash-flow forecasts, access to financing and stakeholder support, and concluded the Corporation can realise its assets and discharge its liabilities in the normal course of business. The statements describe cost-containment measures, liability restructuring and ongoing engagement with financiers on refinancing options.
The priorities the results point to are unambiguous: sustaining rental and contract revenue, completing and selling the mountain of housing inventory, controlling costs, strengthening collections, and managing financing with care. Progress on those fronts, the Board acknowledges, is what will ultimately generate cash – and loosen the Corporation’s reliance on property-disposal gains to report an operating profit at all.
The accounts were prepared under International Financial Reporting Standards and audited by Ernst and Young, which issued an unqualified opinion. The results were signed off by Board Chairperson Othusitse Mbeha and Acting Chief Executive Officer Professor Selinah Busang.
