Botswana Post has expressed confidence that it is on track to significantly reduce the losses it suffered in the 2014/15 financial year. After recording a P52million loss in FY: 2014/15, Botswana Post said in its 2015 annual report that it was bullish on recovery, buoyed by a number of key factors; among them the recognition by government of the need to fund the Post Office to enable it to meet its obligation to provide universal postal services to citizens across the country.
After receiving the long-anticipated government funds, which were largely meant to compensate for the losses made on the delivery of its universal postal service obligations, Botswana Post was able to pay off its P100million loan facility towards the end of last year.
Botswana Post’s financial results for the period ended 31 March 2015 reflect an overall loss making performance. Administrative cost lines were lower than in the prior year, even though the cost of sales grew faster than revenue at 34 percent. This resulted in slightly squeezed margins for Botswana Post, with losses for the year rising from P33.8 million to P47 million. However, total company revenue increased by some 29 percent to P430m driven by business services (86 percent), courier and logistics (154 percent), EMS (25 percent), and philately (100percent). The long anticipated merger of Botswana Post, Botswana Couriers and Botswana Savings Bank (BSB) started to take shape in December 2013 with the establishment of the Botswana Post and Savings Group as the holding company for the three entities. Going forward, the biggest challenge for Botswana Post will be fulfilling the promise of the merger by enabling its three subsidiary companies to benefit from their natural synergies and economies of scale. This will likely be the main focus of the Post Office in the 2016/17 financial year.
Botswana Post developed a strategy a few years ago, but has been unable to implement it because of lack of the necessary financial resources for refurbishment or redevelopment. Also, Botswana Post had to use some of its properties as surety against a P100million loan facility that it took out in the previous financial year to cover capital expenditure projects. The situation was saved by the long anticipated funding from government, which enabled the Post Office to pay off the loan late last year.
In addition, there is growing interest from private companies wanting to engage with the parastatal around the development of some of its sites.
“We are mindful of the fact that it is essential for our post offices to be more visible and accessible to consumers. This could entail opening more outlets in high-traffic areas such as shopping malls, which would then free existing standalone post office sites and avail them for commercial development,” said Botswana Post in its financial statement. Cognizant of the fact that technology required for its alternative revenue streams comes at a huge cost, Botswana Post will now subject all project proposals to a rigorous investment analysis to ensure that they bear fruit as quickly as possible.
“This will enable us to obtain a more realistic view of costs and margins as well as the actual achievable returns,” said Botswana Post.