Tuesday, September 22, 2020

BotswanaPost core businesses push-up revenue growth

BotswanaPost’s major revenue earners (post office box and private bag rentals, bulk mail, Express Mail Service and money orders) achieved an aggregate 37 percent increase in revenue compared to the previous financial year.

Revenue from agency services grew by 49 percent, Express Mail Service’s by 53 percent, box and private bag rental by 62 percent, bulk mail by 22 percent and money transfer services by 17 percent.
Additionally, philately sales increased threefold in the 2006/7 financial year. This dramatic surge in philately sales was largely a result of computerising hitherto manual processes. According to the organisation’s annual report, which the Minister of Communications, Science and Technology, Pelonomi Venson-Moitoi, submitted to Parliament this week, BotswanaPost’s participation at international exhibitions has created awareness of Botswana stamps in the international philately market.

“This, coupled with other marketing efforts, contributed to the increase in turnover on this product by 195 percent. The potential for growth on this product line is considered quite promising and through the help of the Stamp Advisory Committee and the Botswana Philately Society we remain optimistic that this opportunity shall be exploited to BotswanaPost’s benefit,” the report says.

BotswanaPost’s philatelic products have won awards at prestigious international exhibitions.

On the downside, mail revenue declined by 13 percent in the period under review and both the board chairman, Martin Mokgatlhe, and the acting director general, Ruth Mphathi, expressed grave concern about this state of affairs.
“The real threat in this area is that unless letter mail and associated products are innovatively resuscitated, the product line shall ultimately wane. In fact, letter mail volumes continue to decline,” Mokgatlhe says.

Mpathi notes that despite the overall decline in the mail services group of products, the EMS, box and private bag rentals and bulk mail posted impressive growth rates.

The organisation’s direct operational costs went up by 28 percent as a result of staff costs, depreciation and advertising, promotion and mail conveyance.

Mphathi explains of such expense: “The increase in staff costs was attributed to remuneration enhancements that had to be made during the year to retain BotswanaPost’s competitiveness in the job market. The depreciation increase was due to the acquisition of P33 million worth of additional assets during the year and changes made in the depreciation rates of computer equipment. Certain promotional effort had to go towards the revenue enhancement, hence the leap in this cost element, while the mail conveyance costs were largely driven by the cost of fuel and the upgrading of mail delivery routes to most mail destinations, increasing mail delivery rates to up to five times a week.”

An unexpected charge amounting to P2 721 369, being impairment losses arising out of the re-evaluation of fixed assets, was incurred as a result of the application of the International Accounting Standard (IAS) 16.

Mphathi states that this expense “significantly pulled down what would have otherwise been better bottom line performance than the previous year. This element was also the reason for the qualification of the accounts as the auditors were not satisfied with the use of internal resources to carry out the asset valuations”.

The organisation purchased industrial premises in Gaborone at a cost of P8 million to accommodate the international office of exchange. A major operational fleet replacement was carried out at a cost of P4.6 million. In addition to making a significant improvement to delivery performance, this replacement also enabled BotswanaPost to introduce new mail routes.

In the year under review, an additional 19 000 postal boxes were installed throughout the country. The organisation says that it plans to have enough boxes for both corporate and individual clients to reduce the practice of sharing boxes which compromises mail security and confidentiality.

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.