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New acquisitions boost Chobe profits

Chobe Holdings Limited, Botswana’s domestic tourism and hospitality group posted positive results for their financial year ended February 2019 after making several new acquisitions as well as renovations in their existing camps and lodges during the prior year.

According to financial results released by the Botswana Stock Exchange listed group, during the period under review occupancy increased by 5 percent due to growth in available beds following renovations at Chobe Game Lodge and the addition of Dinaka to the Group’s portfolio.

During the financial year, the Group spent, from internally generated cash flows, P82.4 million on the purchase of game drive vehicles, boats, a Cessna caravan significantly improving existing buildings and equipment.  Chobe further reports that the acquisition of Dinaka Safari Lodge and the three property owning companies 1st September 2017 by Ker and Downey Botswana, a wholly subsidiary of Chobe, forming the Dinaka Conservancy, gave rise to P26.6 million goodwill.

The lodge was subsequently rebranded and reopened as a Ker & Downey property n 1st March 2018. Furthermore Chobe says during the financial year under review the company commenced the induction and boarding of agents through Dinaka on educational tours to familiarize themselves with the concept of conservancy tourism, a pioneering and otherwise non-traditional Botswana.
According to Chobe Executive management height end conservancy tourism is relatively new to Botswana, with currently no existing entities to benchmark with. “We have therefore used currently available booking data and cash flows from existing camps as models, modifying them to estimate future cash flows from cash flows for Dinaka, to assess the goodwill for impairment in accordance with IFRS” explained J M Gibson, Chobe CEO and Deputy Chairman. The assessment according to Gibson indicated that there was need to write down the goodwill by P7.4 million.
On the revenue front, figures went up by13 percent after a boost from increased bed night’s old, marginal increase in achieved bed night rates in US Dollar terms and depreciation of the Pula against the US Dollar. When gauged against the financial year ended February 2018 Chobe also attributes increased occupancy figures to enhanced marketing efforts.
Group Profit after tax closed the year at 15 percent increase when gauged against the previous year end. Yearend operating cost figures grew by 14 percent, which considered satisfactory in light of increased volumes of business and current inflation levels.
During the year under review Chobe distributed P1.5 million to phantom share scheme, a window opened in February 2013 which allows employees participation in the dividend distribution of the Group. The scheme allows all qualifying staff to share equally in a bonus which is calculated to be equal to the value of dividends attaching to three million shares in the Company.
Post February 2019 Chobe through its wholly owned subsidiary Ker & Downey Botswana acquired the entire issued stated capital of Nelle Investments ,a property owning holding leases for two game farms in the Hainaveld area for a cash consideration of P15.4 million financed using the Group ‘s internal cash resources . Chobe says the two properties will be utilised to increase the extent of the land holdings currently held by Dinaka Conservancy.
Going forward Chobe says it continues to invest considerable resources to improve its marketing strategies, product offerings and cost controls. “The Group’s strong cash position provides us with the opportunities that may arise.” Said Gibson. Tourism in Botswana is earmarked to provide much needed economic diversification away from mining. This diversification drive, according to the World Tourism Organization needs however, to be cautiously applied to avoid “over tourism”, a relatively new buzzword for tourism congestion, management and carrying capacity. “Over tourism” identifies that the true challenge is not so much the number of visitors, but the capacity to manage them. All this whilst preserving the environment.
Chobe says the continued underperformance of Air Botswana hinders growth in the sector. “For the tourism industry to grow to its full potential there is need to have other airlines with relatively reliable performance to be introduced to the Botswana skies both domestically and internationally” said Chobe Boss in the financial statement.
Chobe Holdings Limited owns and operates, through its wholly owned subsidiaries, eleven eco-tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Namibia with a combined capacity of 314 beds under the brands Desert & Delta Safaris and Ker & Downey Botswana.
 Safari Air, a wholly owned air charter operator, provides air transport services to the group's camps and lodges. Desert and Delta Safaris (SA) (Pty) Ltd, another wholly owned subsidiary operating in South Africa, provides reservation services to the group. The company got incorporated in Botswana in 1983 and listed on the Botswana Stock Exchange in September 29th 1999.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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