- 2023 total income reached P371m, 16% up
- BDC overall performance improved in 2023
Botswana Development Corporation (BDC), the government’s investment arm, has announced a notable surge in income driven by robust operating expenses and a strategic move from equity to debt investments.
Total increased by 16 percent to P371 million, according to the corporation’s audited financial results for the year ended June 30, 2023.
BDC further said interest income grew by 34 percent from the prior year whilst dividend income declined by 48 percent further cementing the corporation’s shift from equity to debt investments.
“It should be noted that the 2021 income from trade included a special dividend of P80 million received by the company,” chief executive officer Cross Kgosidiile said in the statement.
“Operating expenses remained within appetite in the financial year, however, the Corporation was faced with adverse market forces which resulted in significant adverse variances in finance costs and valuation impairments of equity investments,” said Kgosidiile.
Furthermore, BDC observed that due to global rises in interest rates and the complete utilization of approved facilities, it witnessed a 30 percent surge in finance costs during the financial year under review.
“In addition, the strengthening of the US Dollar against the Pula resulted in the company experiencing an unrealised foreign exchange loss of P33 million.”
“Two of BDC’s investment assets were adversely affected by the supply chain disruptions in the market, resulting in underperformance on existing contracts and exposures. The impact of this was additional impairment adjustments of P97 million taken on the value of the investment held at year-end,” said BDC.
Furthermore, BDC indicated that on a positive note, an FMCG company in the Corporation’s portfolio outperformed expectations in the year, adding this resulted in a net fair value gain of P26 million on the entity’s valuation.
“BDC’s balance sheet remains strong with total assets at P5.26 billion, an 18 percent growth from the prior year. Asset performance continues to improve with NPL ratio improving to 17.9% from the 20.5% reported at the end of the prior financial year.”
It also said subsequent to year-end, BDC Bond 002 became due for payment in August 2022. This was fully settled by the Corporation.
The net worth, totaling P2.1 billion, experienced a slight decrease from the previous year’s figure. This decline can be attributed to the combined effects of the financial performance throughout the year and the adverse movement observed in quoted equity prices over the same period.
“As the business world continues to evolve at a rapid pace, it has become increasingly important to adopt forward-thinking strategies that are geared towards maximising long-term sustainable returns.
“This is the vision that the Corporation aspires to achieve through its Beyond 2019 strategic plan, which seeks to transform and position the business for sustained success in the years to come.”
