- Total revenue for the company down by 16 %
- Gross profit down by 25%
The Chief Financial Officer (CFO) Ofentse Mabote reveals in the company’s 2020-2021 integrated report that in the first half of the 2020-2121 financial year, Botswana Post’s revenue suffered heavily due to severely reduced economic activity. However, the company delivered significantly improved results in the second half of the year, indicating a robust and encouraging recovery of the business from the effects of the pandemic
“While this improvement can, in part, be attributed to the modest easing of trading conditions economywide, it is important to note that the business continued to benefit from our close management of costs and revenue protection initiatives,” Mabote says.
“In the face of an extremely turbulent environment the likes of which has never been seen the world over, we made the decision to extend our strategic period by one year. Our number one priority during this time was to focus on managing the impact of the pandemic.”
For the year under review, Botswana Post achieved a gross profit of P72.94 million compared to P97.07 million in 2020, translating into a decrease of 25 percent in comparison to the prior year. Because of the effects of the COVID-19 pandemic, loss before taxation amounted to P42.83 million compared to P39.01 million in 2020, which is an adverse movement of 10 percent in contrast to the previous financial year.
The company’s revenue for the period under review decreased by 16 percent, translated into monetary terms the revenue for the 2020-2021 financial period was P269.18 million compared to P320.77 million in the 2019-2020 period.
“With the exception of the Warehousing, Money Transfer, Postbox and Post Bag Rentals business segments that displayed great resilience, revenue decreased across all other business segments in comparison to the previous financial year,” says the CFO. “This contraction is almost exclusively attributable to COVID-19 movement restrictions. The total decline in revenue amounts to P51.60 million.”
Revenue from the Universal Service Obligation (USO), which Botswana Post says is recognised by the government as an essential service, decreased by 8.2 percent in the financial year under review while Total Other Income had a positive gain, increasing by 1 percent this year to P96.10 million despite a one-off amalgamation cost refund of P7.82 million received from the company’s shareholder.
According to Mabote, costs were well maintained during the period under review and given the utmost priority, with the cost of sales declining by 12 percent, driven largely by reduced spending on airtime expenses which decreased by 39 percent as compared to the prior year mainly due to robust airtime inventory management.
“Mail conveyance costs were lower than prior year by 41 percent due to closure of most borders for long periods of time,” he says. “Other operating expenses decreased by a net of 14 percent when compared to the previous year. This is attributable to robust cost saving initiatives and various factors.”
Cost to income ratio increased by 2 percent from 109.29 percent in the 2019-2020 financial year to 111.67 percent.
But despite the negative impact of COVID-19 pandemic during the period under review and a lingering uncertain future, Mabote says the company’s outlook is positive as Botswana Post makes progress with its technology-driven strategy and continues to foster partnerships with third parties to improve efficiencies and revenue. “These strategic activities, coupled with rigorous cost management, will move the company back to profitability in the long term,” he says of the future.