Botswana Oil Limited (BOL) has attributed its strong financial performance in the 2022/2023 fiscal year to a strategic partnership with Debswana Diamond Company, marking a significant development in the collaboration between Botswana’s energy and mining sectors.
In the company’s recently released annual report, BOL’s Board Chairman Martin Makgatlhe, highlighted that the company experienced a remarkable turnaround, moving from years of losses to impressive profitability. BOL’s revenue surged to P2.6 billion in 2022/2023, up from P570 million in the previous year, with a net profit after income tax of P99 million, compared to a net loss of P17.3 million in 2021/2022.
Makgatlhe credited the company’s improved performance primarily to the partnership with Debswana and new contracts secured with International Oil Companies (IOCs), which significantly boosted both sales volumes and revenue. Additionally, the company benefited from a refund from the Security of Supply Margin (SSM) fund by the Government of Botswana, covering depot management fees for the period from 2017 to 2022. The company also saw an increase in interest income due to healthy cash balances.
“During the year under review, BOL maintained a healthy cash balance of P823 million, which bodes well for meeting its operational obligations, infrastructure needs, and other project requirements,” said Makgatlhe. As of March 31, 2023, BOL’s financial net position had strengthened considerably, closing at P1.244 billion, a significant improvement from P354 million in the previous year.
Executive Director Meshack Tshekedi noted that 2022 was a year of growth for Botswana Oil. The company increased its share of fuel imports from 25 percent to 50 percent, resulting in BOL managing 65 percent of the fuel imports that drove the country’s economic activity. Tshekedi explained that despite initial financial challenges, including a projected loss of P9 million, the company achieved a net profit of P99 million, with a major boost from the SSM refund and a surge in sales volumes.
“Over the year, our sales volumes underwent significant growth, rising from 130 million litres to 173 million litres mid-year, in response to Debswana’s increased consumption and a general surge in demand from IOCs and COOCs due to market supply disruptions,” Tshekedi added. In the final quarter of the year, BOL further increased its volumes, entering into sales contracts with Vivo and Kwa-Nokeng, bringing volumes up to 187 million litres. Revenue exceeded expectations, reaching P2.6 billion, surpassing the budgeted P1.8 billion, driven by higher sales volumes.
The average selling price was P13.79 per litre, slightly higher than the budgeted P13.75 per litre, reflecting the additional 57 million litres sold. This significant performance boost underscores the growing importance of strategic partnerships in enhancing Botswana Oil’s operations and contributing to the nation’s economic growth.
