Despite a rise in revenues, BotswanaPost’s losses widened to P47.1 million for the year ended 31 March 2015 from a P33.8 million deficit recorded in the prior year.
According to the parastatal’s financial results contained in the 2015 annual report, the loss is attributed to a 38 percent rise in cost of sales, which went up from P202 million to P277 million. Revenue also went up by 18 percent from P308 million to P366 million recorded in the 2015 financial year.
The rise in the cost of sales was driven predominantly by electricity sales, mail conveyance and some new costs due to an enhancement of service to several lines of business including social service and CMS Contracts.
According to BotswanaPost Chairman, Pedro Motau there were no real surprises in the financial results. He said the actual numbers could be described as disappointing given the unfortunate increase in the size of bottom line loss.
“The loss do not reflect the significant progress that has been made towards our transformation from a traditional postal operation into an advanced, diversified service provider,” he said.
Motau added that they are aware they need to diversify in order to sustain their operations as a business while continuing to provide a traditional mail service. He said their current five-year journey to excellence strategy, which draws to a close in March 2016, was designed to drive their diversification and transformation programme so as to advance towards a diversified service provider.
“Transformation requires significant resources which we as an operational entity do not have. Depleted cash flows, coupled with a resultant loss in interest earned, also placed restrictions on the amount of prepaid electricity and bulk mobile phone airtime we were able to purchase to resell to consumers had a negative impact on our revenues,” he said. Motau said despite the loss, BotswanaPost was on track to significantly reduce the losses in the current financial year, which will be achieved as a result of several factors.
These factors include government’s funding to enable BotswanaPost to meet its obligation to provide a universal postal service to citizen across the country.
“As the profitability of the company improves, this will give us the ability to initiate additional alternative revenue streams. We are also aware of the fact that technology required for these alternative revenue streams comes at a cost,” he said.
Motau added that the cost control initiatives introduced in the 2014/15 financial year continues, adding that they expect to see results in the next financial year.