BIHL wants turnaround in Letshego’s weak spots
Pauline Dikuelo | Monday March 13, 2023 06:00
Botswana Insurance Holdings Limited, the country’s largest diversified financial services group, has been a loyal shareholder in Letshego, riding through recent periods of reduced profit contributions and growth.
For the year ended December 2022, Letshego reported a 30% drop in pretax profits to P801 million, with the weaker performance partly due to below-par performances in Ghana, Tanzania, Kenya, Nigeria, and Rwanda.
Letshego has deployed Fergus Ferguson, its former CEO for Letshego Botswana and regional head for Eswatini and Lesotho, to undertake a turnaround in East and West Africa where adverse macroeconomic conditions worsened the trend of general weak performances.
On Wednesday, BIHL CEO, Catherine Lesetedi told BusinessWeek that the group is concerned about Letshego’s performance in East and West Africa.
“There are turnaround markets which have been identified by Letshego and those markets must account for themselves,” she said. “There are views that if management doesn’t want to turnaround these, at some point we need to exit because they are really draining resources.”
BIHL’s share of profits from associates and joint ventures decreased by 22% to P237 million on account of Letshego’s subdued performance and the exclusion of the FSG’s share of income for the last six months of the year. This is a result of BIHL’s decision to sell the investment, according to BIHL’s audited financial group results for the year ended December 31, 2022, unveiled this week.
Meanwhile, BIHL recently disposed of its 37.62% shareholding in FSG for a cash consideration of P250 million. BIHL has plans for acquisitions in the region, but in the meantime has declared a special dividend of 89 thebe for equity holders.
“Part of the special dividend is paying back all the proceeds from FSG because we currently do not have any project,” Lesetedi said. “It does not make sense to retain the cash without any potential acquisition in the near future.”