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BPC announces first profit in a decade

Publishing Date : 09 July, 2018

Author : TSAONE SEGAETSHO

The Botswana Power Corporation(BPC) has performed well above expectation as its recently released financial report highlights that the corporation’s operating income grew by 34 percent-which stood at P138 604 million in this current financial year against P103 544million of the previous year.


The improvement in BPC performance comes after the company has been experiencing a ten year drought since its last profit making year in 2008. BPC chairman Sebetlela Sebetlela revealed that their improvement in performance is owed to their efforts in making both Morupule A and B projects. When announcing the company’s milestone, Sebetlela never failed to announce the contribution of the two plants to the growth and performance of BPC.


Off the Morupule B Sebetlela said, “the combined effort of stabilizing Morupule B operation and competitive electricity trade on the SAPP market resulted in a cost reduction from BWP 1.964 billion in 2015/16 to BWP 1.514 billion in 2016/17, (a reduction of BWP 449 million).”
He also added that stabilization of Morupule B operation resulting in improvement of plant availability from 56% to 70% hence a significant reduction of power imports.


Government last month stopped in its tracks to sell Morupule B to a Chinese company after negotiations between two parties hit a snag. The plant cost P11 billion to build and it has been bleeding a lot of money from government since its inception and the contractor was blamed for mismanagement of the project.


“Recovery of Morupule A plant degradation and pollution abatement which will see the return to service of Morupule A Power Station providing 120MW generation capacity by end of December 2017,” said Sebetlela on Morupula A’s contribution to BPC’s healthy profits.
With this country having experienced less power crises in the 2016/17 period, Sebetlela lauded BPC saying the corporation has managed to achieve its strategic objectives amongst them being, stability of power supply and the financial turnaround of BPC.


According to BPC CEO Dr Stefan Schwarzfischer, the corporation is still going through an exercise of restructuring and that will see a much better BPC in future. “The power utility will be less reliant on subsidies from Government, become self-sufficient in power supply with improved customer service. Most importantly, we will also improve our supply of renewable energy to about 20 percent which is important as far as reduction of carbon emissions into the environment is concerned,” said Dr Schwarzfischer.


Coming with good performance, BPC made sure that its total operating expenditure reduced by 12 percent-was P4.3 billion in 2017 a decrease from P4.9 billion the previous year. BPC’s current liabilities also recorded a decline of 9 %, from P4.7 billion in 2017 to P4.27 billion in 2016. BPC’s non-current assets increased by 6 percent-to P17.806 billion compared to P16.734 billion in 2016.


However with the promising year BPC also recorded 3 percent decline in total revenue, 4 percent decrease in non-current liabilities and a 41 percent increase in total comprehensive loss (P140.247 million loss incurred compared to P99.61 million loss in 2016). Auditors of BPC raised a red flag on the corporation incurring losses as going concern. 


“The Corporation has incurred a loss of P1,807,747,000 (2016: P2,420,973,000) before taking into account the tariff subsidy grant received from the Government of the Republic of Botswana of P1,667,500,000 (2016: P2,321,360,000). In addition, as at 31 March 2017 the Corporation’s current liabilities exceed its current assets by P2,954,,790,000 (2016: 3,015,717,000). These conditions indicate the existence of a material uncertainty about the Corporation’s ability to continue as a going concern,” said the BPC report.

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