COVID-19 worsens BotsPost’s string of losses
Pauline Dikuelo | Monday January 24, 2022 06:00
According to its annual report made available this week, BotswanaPost has recorded after-tax losses from as far back as the 2017 financial year, with only a narrow P3.1 million profit recorded in 2018. In its latest annual report, the group attributed the latest loss to the impact of COVID-19 which CEO, Cornelius Ramatlhakwane, said was first felt as early as the 2019 financial year. “This came in the form of a steep decline in inbound parcels,” he said. “Worldwide lockdowns, border closures, depressed economic activity and overall chaos has extracted deep cuts in the revenue we can earn through international business. Couple this with an equally devastating impact at home and it feels like we are battling two pandemics.” In the year to March 2021, BotswanaPost’s total sales revenue declined by 16% to P269.2 million.
The group’s traditional revenue lines include the box and bag rentals, philatelic products (stamps) and mail revenue, while recent efforts to diversify have introduced streams such as electricity, airtime, money transfer commission, agency services, terminal and transit duties as well as courier and warehousing. BotswanaPost’s books indicate that in the year to March 2021, all these revenue lines took a knock except for box and bag rentals as well as money transfer commissions. Ramatlhakwane said despite the hard-won financial progress the group has made, its status as a going concern continues in a precarious state. “This stems from our weak balance sheet position, adverse liquidity and high gearing.
Unless we receive the help we need from our shareholder, these are the type of factors which will adversely affect our value creation and sustainability agenda at BotswanaPost,” he said. The CEO further said there is a likelihood of insufficient capital to implement strategic projects and support operational activities. He lobbied the shareholder, government, for capital injection to support implementation of strategic intents. “We are seeking commitment from the government for reimbursement of the Universal Service Obligation and changing of the business model, including restructuring, to transform the company for the better,” he said. Meanwhile Ramatlhakwane said BotswanaPost faces an influx of new players in the courier and logistics space as well as competition from other industry players making inroads into niche products.
In addition, the group is encountering disruptive technologies which could erode its market share and competitive advantages. Over the years, BotswanaPost has fought to diversify from its mail courier origins, expanding into various technological solutions. The group has also engaged various private sector partners using its extensive physical network of post offices to offer agency services. “During the year under review, we were also able to revamp our mobile PosoApp, launched a new MobileVend service platform and rolled out an exciting Virtual Post Box solution,” the CEO said. “Today, our customers can access an even wider array of services from the comfort and safety of their homes, without ever needing to visit a physical Post Office,” he ended.