BDC group posts P63m loss as COVID-19 hits subsidiaries
Pauline Dikuelo | Monday January 17, 2022 09:23
In results unveiled recently, the group said the weaker performance was due to its subsidiaries’ exposure to sectors hard hit by the pandemic. BDC, a government investment agency charged with economic diversification, has subsidiaries in manufacturing/industry, property development, agriculture and services.
For the year to June 2021, most of the BDC group’s major incomes lines, such as interest, dividends, rentals and share of profits from subsidiaries, were down compared to the previous year.
“A number of group companies operate in industries negatively affected by COVID-19,” directors said in the latest results. “This had a key adverse impact in income lines such as dividend and rental income. “Aside from the impact on rentals and dividend income, valuation of investment properties in the year were noted to have a marginal decline compared to prior periods where fair value gains of P125 million were recorded.” Adverse movements in foreign exchange rates also resulted in an unrealised losses of P24 million, as the dollar gained against the Pula during the year under review.
Another P141 million was noted as unrealised fair value loss in listed shares, as the pandemic played havoc with the BDC’s investments on the Botswana Stock Exchange. Despite the headwinds, BDC raised new funding to facilitate disbursements into new projects, with total investment assets rising to P3.59 billion from P3.5 billion in June 2020.
The new disbursements include a strategic investment into an internationally recognised producer of convenience meal solutions for consumers throughout Sub Saharan Africa and global markets.
In 2021, the Fast Moving Consumer Goods sector comprised 84% of the BDC’s investment disbursements, followed by 13% to the real estate sector, two percent to tourism and hospitality as well as one percent to manufacturing.
Meanwhile, the group’s total assets remained strong at just under P5 billion as at June 30, 2021. “BDC's strategic intent is to explore ventures that will further build and enhance Botswana industries, transform the economy and return high yields that contribute towards the Vision 2036 ambition to realise a high-income country standing,” directors said.