Property company and BSE quoted – Turnstar Holdings has said that due to inflationary cost pressures in the local economy, together with the increase in finance costs and foreign exchange losses, its profit before taxation (PBT), for the half year period ended 31 July 2022, is expected to be 11.5% lower (or P7 million). The property company says it now expects P54 million Profit before Tax for the period under review compared to P61 million registered during the half year period ended 31 July 2021.
Despite the anticipated fall in PBT, the company says its rental revenues will increase by approximately 11.3 percent compared to the corresponding half year period ended 31 July 2021 (P 128.2 million for the half year period ended 31 July 2021 compared to P 142.7 million for the half year period ended 31 July 2022). The increase in rental revenues resulted in a marginal increase in the Group’s operational profit despite current inflation.
Botswana’s inflation, according to Statistics Botswana’s Consumer Price Index (CPI) quickened to its highest level this year driven by price rises for fuel, food and miscellaneous services.
Meanwhile Turnstar directors said that escalating borrowing rates resulted in an increase in the group’s finance costs compared to the comparative prior period. “The US Dollar also appreciated substantially against the Botswana Pula, during the current half year period, resulting in foreign exchange losses recognised on the Group’s borrowings denominated in US Dollar”, says the Turnstar board in a cautionary statement.
The board also stated that the foreign exchange translation gains are unrealized and are dependent on the US $ /BWP exchange rate at the reporting date. The results as at and for the half year period ended 31 July 2022 will be published before 31 October 2022.
