BHC aims to mitigate P14.5m profit slump
Pauline Dikuelo | Tuesday November 22, 2022 06:00
According to the group’s unaudited results for the six months ended September 30, 2022, the corporation attributed the decrease to an increase in operating expenses and financing costs.
The group’s operating costs also increased year on year on the back of increased repairs and maintenance. Commenting on the results, BHC's acting CEO Nkaelang Matenge said during the period under review, they did not start any project and it has affected the rate of capitalisation to projects of both interest expenses and staff costs resulting in an increase in interest expenses year on year by 24% to P18 million.
“However, the corporation has three major projects which are scheduled to start in the second half of the financial year and this is expected to mitigate against this negative performance,” he said.
The corporation plans to start 531 housing units before the end of the financial year, about 196 units in Gaborone Block 7, 212 units in Kazungula, 100 units in Maun, 13 units in Phakalane, and 10 units in Tsabong. During the reporting period, the group’s sales revenue which is the major revenue stream did not perform well, decreasing year on year by 93% to P5 million from P74 million.
This negative performance was driven by low sales volumes compared to the prior year. “The old stock which has relatively higher margins dominated the sales mix at 30 units compared to new stock which sold 11 units,” he said. Meanwhile, the rental income, which is the second major revenue stream for the corporation increased by P18 million to P139 million compared to the same period in the prior year.
The corporation attributed the increase to rental adjustment which was effected in April and some additional housing units added to the investment properties portfolio. There was also an overall receivables impairment reversal of P1.8 million which contributed positively to the corporation's performance for the six months.
The vacancy rate at the end of the review period was 1.61 percent which is above the corporation benchmark rate of 1.5 percent representing 161 vacant units across the country. “Rental revenue continues to be the cornerstone of the corporation’s financial sustainability and the strategy of maintaining a rental threshold of 10,000 units will continue,” he said. Income from professional fees and facilities management was P17 million, a decrease of 25% when compared to the prior year. The reduction was on the back of low activity on construction projects due to clients’ decisions to defer some of the planned third-party projects.