The economy is in the doldrums amid a pandemic that has caused uncertainty but the diversified giant Sefalana is riding through the storm, delivering stellar set of financial results.
While 2020 had presented unprecedented challenges to governments, businesses and households, Sefalana’s profits have been on the rise. According to the financials for the six months ended October 2020, revenue was up 2 percent to P2.9 billion and with expenses rising slightly, the company managed to rake in P148.3 million in profit after tax, up 23 percent from the comparable period in 2019.
“We are once again delighted to report our best ever half year results – profit before tax of P149 million. This is on the back of reporting our best ever full year results to 30 April 2020,” said Sefalana managing director Chandra Chauhan in a commentary accompanying the financials released on Friday.
“Our group had put in place measures as early as November 2019 to prepare for the unknown impact of the pandemic, and this has helped us navigate through the difficult times,” he added.
The Botswana Stock Exchange listed group’s business interests spans fast moving consumer goods (FMCG), commercial motors, manufacturing, properties, and government contracts. The group was held strong by the FMCG business which remained resilient despite challenges.
The Botswana based group also has operations in Namibia, Lesotho, South Africa, Zambia and most recently Australia. In Botswana, Sefalana operates 58 stores: 4 hyper stores and 25 Cash and Carry stores, both mainly targeting resellers and bulk buyers. It also has 29 retail stores under its Shoppers brand. The Botswana operations are responsible for 51 percent of the group’s profits.
While the country remains the group’s cash cow, Botswana experienced the greatest impact of the pandemic, largely as the result of the restrictions placed on the sale of liquor and reduction in sales of motor vehicles. The intermittent ban on alcohol sales resulted in P8 million of lost profit during the period under review.
Sefalana Namibia, which has now become an important market for the group, contributed 31 percent of revenue and 27 percent of profit to the whole group.
“Our operations in Namibia continue to grow despite evidence of stress in the economy, largely through margin focus and cost curtailment. This business continues to make a significant contribution to overall group results each year,” Chauhan said.
The four stores in Lesotho were also a good show, delivering a P2 million profit compared to the previous P3 million loss.
The investment made in 2017 when Sefalana invested R250 million in a South African consortium continues to perform well. The consortium owns 16 stores across South Africa, with plans to acquire a number of existing chains to grow the number of stores.