BotswanaPost in negative equity position

BotswanaPost’s financial results for the period ended 31st March 2015, released this week is a tale of two halves.

In one half there are the negatives such as the overall loss-making performance and there are some major positives that augur well for the achievement of a sustained turnaround going forward, in the other half.

The company’s total revenues increased by some 29 percent to P430million driven by business services (86 percent), courier and logistic (154 percent), Express Mail Services (25 percent) and philately (100 percent).

Most significantly, administrative cost lines were lower than in the prior year. However, the cost of sales grew faster than revenue at 34 percent. This translated into slightly squeezed margins and therefore overall results are down, with the loss for the year rising from P33.8million to P47million.

Board Chairman, Polokoetsile Motau said there were no real surprises in the financial results for the year under review. “While actual numbers could be described as disappointing given the unfortunate increase in the size of the bottom line loss, they do not reflect the significant progress that has been made towards our transformation from a traditional postal operation into an advanced, diversified service provider”.  

Transport and Communications minister has encourgared the company over the years to diversify in order to sustain its operations as a business, whilst at the same time continuing to meet its obligations of providing traditional mail service.

This has seen the government who is the company’s major shareholder not injecting money to the parastatal.

Under the former Chief Executive Officer, Pele Moleta who left the parastatal sometime in 2015, the company developed a five year journey to excellence strategy which draws to a close in March 2016.

Motau feels that transformation however, requires significant financial resources, which the company as an operational entity currently does not have. “Depleted cashflows, 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 in order to resell to consumers; and this had a negative impact on our revenues.”

As a result, Motau said “it is clear that we need to engage a lot more with shareholders in order for them to inject the capital required so as to move out of our current negative equity situation.”