Botswana Housing Corporation (BHC) revenue for the year ended 31st March 2021 has dropped to P760 million, 14 percent decrease when compared to the P880 million recorded in the prior year.
The corporation has attributed the decrease in total revenues to mainly due to decrease in sales revenue which decreased significantly by P153 million from P350 million recorded in the prior year.
“This has been a rather challenging year due to the impact of the Covid 19 pandemic on the Corporation’s operations. The Corporation recorded a drop in profitability compared to the previous year,” reads the financial report.
Stated in the financial statement is that during the period under review, 405 properties were sold from housing inventories and investment properties compared to 829 in the previous year. Added is that this revenue stream was impacted negatively by the Covid 19 pandemic as government being the major client reduced spending on house purchases as it redirected resources to the fight against the pandemic. This trend is expected to persist in the short term whilst the economy recovers.
BHC’s rental revenue increased by 5 percent to P209 million from P199 million recorded in the prior year and that the increase was mainly caused by addition of new properties to investment properties, at cost recovery rentals. The corporation stated that rental revenue is the second major revenue stream for the Corporation after sales revenue.
“The total rental stock at the end of the reporting period was 9 911 units and these units are rented to house Batswana across the country. The vacancy rate is below the industry target of 1.5 percent,” reads the statement.
BHC’s total impairment expenses for the year under review is P25 million and this is a significant increase of P23 million from the previous year and stated is that this has affected the Corporation’s profitability. Further stated in the report is that a significant increase was experienced mainly due to some of the of Corporation’s clients being affected by the Covid pandemic.
“A dispute with one major client compounded the situation. The Corporation is confident that the issue with the concerned client will be resolved during 2021/22 financial year,” reads the report.
A look into profitability, the Corporation recorded an operating loss of P6 million representing a significant decrease against the P51 million operating profit realized in the prior year. Profit before income tax decreased by 96 percent from P54 million in the prior year to P2 million. Stated is that this resulted in an overall decrease in profit after tax of 98 percent from P49 million prior year to P1 million for the year under review. The corporation further stated that this significant decrease in profitability was driven by low sales revenue from property inventories and investment properties, decrease in professional fees revenue and increase in impairment expenses.