Sunday, September 27, 2020

Mmutle takes his broom to MRI

MRI Botswana, the embattled medical emergency outfit, has put cream in its structure by appointing Rockie Mmutle ÔÇô one of the country’s top managersÔÇöto save the organization from prolonged periods of torrential losses.

Mmutle, who, several times, has won applause from his peers at G4S for being a man of detail and innovation, will take over the company as its managing director within the next two months.
He fills the post left by Phillip Makgalemela who left last December.

The move by Mmutle is largely seen as “a personal fulfillment” rather than an opportunistic move as he wants to test his business model, which he had some years back, on MRI. While still leading G4S, he proposed one of the most radical moves in the corporate history of Botswana when he came with the idea of buying out MRI as it was sinking into the mud.

His intention was to buy it and turn it around because he believed that it had a lot of potential. That idea was rebuffed by one of the big offshore shareholders of MRI.

“One company that makes me cry buckets is MRI. The company has a lot of potential but the only problem is that there is no innovation there,” he once said after his proposal was rejected off hand.

The medical emergency rescue company has failed to meet investors’ expectations for years as a result of losing a big government road assistance contract to its junior competitor, Netcare.

The loss of the contract saw the two emergency companies switching their competition from ambulances and emergency rescue to court. That did not help MRI as it ended up losing close to P 400, 000 in legal fees in a case which they also lost. To make matters worse, it signed a deal with the Botswana Football Association to sponsor the First Division league as part of the marketing strategy. But that also failed to yield any positive results until they considered dropping it.

Its call centre loss, the Police emergency number 999, was yet another loss of an important source of income. But they are hopeful to replace it with a new contract before the end of the year.

Further, boiling international crude oil prices had an effect on the company which affected its operation and the balance-sheet.

According to its audited results to end of June last year, revenue remained flat at P 17.8 million while net profit slouched to P 3.3 million against P 4.5 million compared to the same period last year.

Operating costs for that year jumped up by over P 1 million, from P 7.7 million to P 8.8 million, as it came under pressure from repeated administrative pricesÔÇölargely because of the international crude oil prices ÔÇô and goods and services sourced from the USA and aircraft retainer fees.

“The results are below expectation due to slow revenue growth. The less than expected results were compounded by cost increase, notably fuel prices which impact significantly on the operating costs of ground and air ambulances,” the company said.

“I think they got a big knock from the loss of government tender. It has been generating a lot of money for the company in the past five to six years,” chief executive officer of Stockbrokers Botswana, Geoff Bakwena, said.

Early last year, Stockbrokers Botswana, which also acts as MRI’s sponsoring broker, warned the market about possible jaded results but also indicated that the company was embarking on a number of products and re-branding some in a bid to resuscitate its bottom-line.

“Prospects for the remainder of the year do not paint a rosy picture given the moderate success of the earning diversification initiatives of the call centre, metro, Road Side Assistance and training,” stockbrokers Botswana warned.
MRI further indicated that a spike in costs was due to the rise of imports sourced from USA through South Africa, 14 percent retainer fee hike for the company’s aircraft and an aggressive recruitment of paramedics targeted at enhancing the performance of its core business.

However, it said it had embarked on a comprehensive plan aimed at improving its bottom line. Some of the initiatives include an aggressive cost cutting plan, the launch of Zebra Card and the planned telemedicine product that comes to the market next year.

“A new initiative in Telemedicine will be launched in the new year. It will significantly improve the capabilities of the emergency medical service personnel as well as provide opportunities for the company with the general health sector.

“Our emergency service has further been enhanced with the purchase of a neonatal intensive care incubator which places MRI in the unique position of being the only service provider that can safely transport neonates,” MRI said.

However, the service has not taken off the ground dispite a lot of talk.

RELATED STORIES

Read this week's paper

Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.