BTCL loses P370 million in assets impairment

Botswana Telecommunications Corporation Limited has recorded a loss of over P300million in the 2015/16 financial year.

BTCL, the first parastatal to be privatised under the Botswana Privatisation Policy acknowledges that 2015/16 was a challenging year for the company performance-wise.

Despite the company delivering a steady set of results, registering 0.4 percent growth in revenue, it registered a loss of P371million due to asset impairment. BTCL’s chairperson, Daphne Matlakala however explains that, “It is imperative to put the reported loss into perspective. 

This is not operational loss; it is a loss resultant from an impairment charge. i.e. an adjustment of the value of the company’s asset base to align it to its value generating ability. At year end, the carrying value of the company’s assets was higher than its value generating ability.”

The company disclosed the need to make this adjustment in the prospectus; the adjustment was estimated at P306 million for the year, but the actual adjustment at year end was P522 million, resulting in a much higher than expected loss of P371 million compared to the projected loss of P128 million.

Excluding the impairment charge, the company registered a profit before tax of P54 million. The adjustment was necessary to position the company for profitability in the future because by making the adjustment now means future profits will not be hit by higher levels of depreciation or significant levels of impairments.

Despite the reported loss, the Board recommended a dividend of 5 thebe per share; representing a dividend yield of 5 percent on the company’s listing price of Pula 1.00, over 3 months since listing. Matlakala notes that, BTCL is able to pay dividends on the back of cash generated for the year 2015/16 and accumulated profits from previous years. She adds that, the company’s cash position is very strong, allowing for focused, revenue generating investment going forward.