The Botswana Housing Corporation (BHC) has reported lower earnings in the interim results for September 2022.
The state owned property developer experienced a decrease in profitability after revenue decreased on the back of low activity on construction projects, an increase in operating expenses and financing costs. The reduction in stream sales revenue – the corporation’s major revenue – declined by 93 percent to P74 million for the six months reporting period.
The second main revenue earner – rental income – went up by 15 percent to P139 million, thanks to rental price increases which were effected in April and some additional housing units added to the investment properties portfolio.
Factoring in other sources of income, BHC’s revenue for the six months ended September 2022 was P251 million, a decline of 24 percent from the the P332 million recorded in the same period in 2021.
With operating costs also increasing year on year on the back of increased repairs and maintenance, BHC ended making up a profit after tax of P3.5 million for the period under review, a massive decline of 81 percent from the 2021 interim profit.
The state housing agency with total assets amounting P2.8 billion, says three major projects which are scheduled to start in the second half of 2023 will mitigate against the reverse the negative effects of lower sales and rental revenue that was experienced during the period under review. The Corporation plans to start 531 housing units in Gaborone Block 7 (196 units), Kazungula (212 units), Maun (100 units), Phakalane (13 units) and Tsabong (10 units) before end of the financial year.
In spite of the fall in profitability, BHC has a strong cash balance of P449 million, an increase of P105 million from the prior year.
“BHC remains a financially sustainable and resilient state owned entity. The planned projects are expected to continue to provide the much-needed shelter for individual buyers, government, and local authorities. The Corporation will continue to work closely with its major stakeholders to ensure that it delivers value to them,” said board chairman Moemedi Gabana and the BHC acting chief executive officer, Nkaelang Matenge, in a joint statement accompanying the results.