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The Botswana Development Corporation Limited (BDC) released its unaudited results for the 6 months ending 31 December 2022, recording a 14% increase in revenue to P168 million (USD16.8 million). The state-owned investment company attributed the improved performance to higher income from debt-based and near-debt assets, new investments and increased dividend inflows.

BDC is a development finance institution founded in 1970 by the Government of Botswana as the sole shareholder. Its mandate is to promote the development of industrial, commercial, and agricultural enterprises in Botswana. The company is a key player in the development of industrial parks and warehousing facilities to support industries and logistics enterprises.

BDC’s income from debt-based and near-debt assets rose due to new investments concluded in the period and higher interest rates. Revenue from investments grew to P17 million (USD1.7million), up from the previous period, buoyed by increased dividends from associates. The company noted that it continues to grapple with rising interest rates and a strengthening dollar against the Botswana Pula.

The company recorded a net profit of P3.2 million (USD0.32 million) for the half-year period. However, profitability was dented by unrealised foreign exchange losses of P13 million (USD1.3 million), mainly due to the dollar’s sustained rally against the Pula. BDC is exploring long-term hedging solutions to mitigate the impact of currency fluctuations.

BDC’s total assets declined 3% to P5.2 billion (USD520 million) at the end of December 2022, compared to the end of June 2022. The marginal decrease stemmed from the utilisation of cash reserves to service borrowings, including the redemption of Bond 002 on the Botswana Stock Exchange in August 2022. However, investment assets expanded 7% following investments in various projects, including the revival of operations at the Lobatse Clay Works, which are poised to commence in the coming months.

The BDC board continues to prioritise integrity and generally accepted governance practices to ensure ethical business conduct. The directors endorse internationally accepted principles of corporate governance and public responsibility.

Strategic Outlook

As the business landscape rapidly evolves, BDC recognises the importance of forward-looking strategies to maximise sustainable long-term returns. The company aims to achieve this goal through its Beyond 2019 strategic plan, which seeks to transform the business for sustained success.

Key to BDC’s transformational approach is investing locally in large-scale, export-oriented businesses that promote citizen economic inclusion. The company also plans to invest globally in high-return commercial and strategic projects to integrate Botswana into the world economy through partnerships.

By pioneering industries and unlocking value in untapped sectors, BDC believes it is well-positioned to explore Botswana’s potential and create opportunities. In addition to its futuristic goals, BDC has several key mega projects in its pipeline expected to drive growth and diversification. These projects aim to generate long-term returns for BDC and substantial socioeconomic benefits for Botswana. Their successful implementation will be instrumental to BDC’s continued success.

Equity Axis analysts believe that BDC management should focus on diversifying its investment portfolio, both locally and globally, to mitigate against concentration risks and take advantage of high-return opportunities. They should also explore new sectors and industries to unlock untapped value and create growth opportunities.

In addition, BDC can leverage the current economic environment in Botswana, which is characterized by a stable political climate, supportive policies, and a strategic location, to expand its operations. The government's focus on economic diversification and promotion of private sector-led growth also presents opportunities for BDC to partner with local and international investors to drive economic development.

In summary, BDC, a state-owned investment company in Botswana, has recorded a 14% increase in revenue and a net profit of P3.2 million for H1 2022. The company aims to transform its business for sustained success through its Beyond 2019 strategic plan, which focuses on investing locally and globally in large-scale, export-oriented businesses and high-return projects. By diversifying its investment portfolio and leveraging the supportive economic environment in Botswana, BDC can create growth opportunities and promote economic development in the country.

-Equity Axis News