High end safari tour operator Chobe Holdings’ share price plummeted last week as investors digested news of projected massive loss.
The company’s share price on the Botswana Stock Exchange (BSE) last week Monday lost 58 thebe to trade at P8.60, which is an 8.8 percent loss in value since its year opening price of P9.43.
The investors reacted to the hospitality and leisure company’s plunge in profitability, recording a P67 million loss after many years of strong profits. Company shares had already shed some value before the announcement, a sign that the massive loss has been anticipated by investors, who got an insider view of how the Covid-19 pandemic has wrought the tourism sectors last year when Chobe reported a significant decline in revenues, decreasing from P224 million to P17.3 million, and resulting in a P35.3 million loss unlike the P77 million profit garnered in the half year financials for August 2019. The loss stunned the company management which before the pandemic was expecting a bumper year of profit.
Meanwhile, Chobe’s 8.8 percent share price loss is greater than the BSE’s Domestic Company Index (DCI), that tracks share price performance of the 24 listed companies on the domestic counter, having fallen by 4.15 percent, in line with declining profitability of listed companies.
For the fifth year straight, the DCI has been on a downward trend, falling by 11.3 percent in 2016, before recovering slightly in 2017 with a 5.8 percent loss but and continued to stumble over the years, with average losses a bit over 11 percent. In 2019, the DCI narrowed losses to 4.6 percent and while 2020 begun strongly for the BSE, it ended the challenging year with the index down by 8.2 percent.
