Botswana Telecommunications Corporation Limited (BTCL), the lone telecommunications firm traded on the Botswana Stock Exchange (BSE), has released a robust financial outlook, projecting a significant surge in profit before tax for the fiscal year ending March 2024.
In a statement issued last week, BTCL indicated that its profits could increase by as much as P55 million compared to the previous year. The telecom operator anticipates pretax profits to rise between 32 and 37 percent from the P148.5 million recorded for the fiscal year ending March 2023. BTCL is scheduled to announce the official results on or before June 30, reflecting the company’s confidence in its operational performance and strategic initiatives.
Established by the Botswana government in 1980 under the Department of Post and Telecommunications, BTCL was the country’s pioneering telecom provider, widely known as ‘Telecoms’ during the 1990s. The company’s historic 2016 initial public offering (IPO) marked it as the first and only telecom firm listed on the BSE, with shares initially priced at P1. The IPO attracted over 50,000 Batswana shareholders, making it one of the most significant IPOs in Botswana’s history.
Despite its landmark IPO, BTCL has faced a challenging market narrative over the past seven years. The company’s stock has consistently traded below its IPO price, delivering disappointing returns to shareholders. This underperformance is largely attributed to the high proportion of retail investors in BTCL’s shareholder base. With around 50,000 individual shareholders—approximately 26,000 of whom hold fewer than 2,000 shares each—BTCL is the most retail-investor-heavy stock on the BSE. The presence of such a large retail investor base often leads to higher volatility and can impact the stock’s performance.
Amid the steady decline in profitability and the stock value, the company’s dividends paid to shareholders have also decreased over the years. The fall in dividends paid to shareholders over the past few years is also due to the company’s weakening bottom line. In 2017, when the telco registered a profit after tax of P237 million, it paid out P90.3 million in dividends, and when profitability fell to P217 million in 2018, BTCL shelled out P155.6 million to investors. Profit further declined to P162 million in 2019, with dividends paid out also falling to P139 million for that year. In December 2023, BTCL declared a final dividend of P0.0671 per share.
Notable institutional shareholders include the Botswana government, Botswana Public Officers Pension Fund, Farouk Ismail, Debswana Pension Fund, Botswana Police Savings and Loan Guarantee Scheme, and the Motor Vehicle Accident Fund.
