Monday, October 3, 2022

Absa does not see much ‘red’ on its 2022 interims

Local banker, Absa Botswana has revealed that its condensed consolidated half year results for the period ended 30 June 2022 will be higher than those reported for the same period in 2021.

In the interim period that ended June 2021 Absa saw a profit before tax surge by 125 percent to P290.3 million, thanks to reduction in loan impairments and costs containment. The bank’s operating costs in the first half of that year were contained, reducing by 7 percent to P460 million.

But now the Botswana Stock Exchange quoted banker says it expect to stay on the green lane with Profit before tax for the 2022 interim period now expected to be higher by between 30 – 40 percent, (approximately P87 million to P116 million) than what was reported for the period ended 30 June 2021.

“The full details will be provided to the shareholders at the announcement of the condensed consolidated half year financial results due to be released on 15 September 2022. Accordingly, the shareholders of the Company and potential investors have been advised to exercise caution when trading in the Company’s securities until the results are formally published”, reads part of the baker’s cautionary statement issued last week.

The banker early this said it is becoming increasingly optimistic about the country’s economic recovery, though it urged caution. The Bank said the easing of COVID-19 containment measures allowed economic activity to resume boosting business sentiment and improved economic activity including resumption of global trade in diamonds. It also noted that Botswana’s 2022 economic growth will be underpinned by the recovery in key sectors such as mining as the effects of the pandemic recede and commodity prices rebound.

“The rise in diamond output will continue to be driven by additional investment in productive capacity and increased international demand for luxury goods caused by the continuing economic recovery in developed markets,” the Bank said. It said the non-mining sectors are also expected to improve supported by accommodative monetary conditions implementation of business environment reforms and government interventions against COVID-19 including the Economic Recovery and Transformation Plan (ERTP).

Just like other industry captains, the banker however cautioned about inflation which keep rising and have since reached 14.3 percent. “Upside risks to the inflation outlook remain elevated in 2022. The rise in commodity prices particularly fuel and food prices remain a key threat to Botswana’s inflation outlook in 2022,” the Bank said in April 2022.

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