Be patient – BTCL to investors
Botswana Telecommunication Corporation Limited (BTCL) Head of Stakeholder Relations, Thato Sedirwa has said contrary to the perception in the market space that BTCL stock and figures are on a non-redeemable fall, the company share structure remains relatively the same since IPO, indicating BTCL shareholders still have confidence in the company’s transformation journey.
“There is a narrative that institutional investors are dumping BTCL, that is not true because shares held by institutional investors are significantly of large volume,” she said. “This means if an institution dispose its BTCL shares, only an institution can purchase because of the monetary requirement attached to the shares, this then results in little or no change in our investment structure because when one institution is selling another is buying,” she said.
Sedirwa added that institutional investors sell their shares because of various reasons such as change in mandate, fluctuating investment philosophy and profile. “Some institutions actually sell because they want to balance their books, and there is always another institution to uptake that stock, so it is actually misleading to conclude that investment institutions are dumping BTCL,” she explained. At the 2016 April IPO which was significantly over subscribed, BTCL shareholders were sitting at just over 50 300.
Of this, 82 percent were shareholders holding 5000 shares and less, adding into only 9.3 percent of the total company stake. Two years later , as of march 2018 , the structure had only slightly changed , still depicting thinly held stocks with holders of 5000 and less shares accounting for 80 percent of the total shareholders, adding into just over 7.1 percent of the total BTCL shareholding.
BTCL investment profile comprises of three segments; the 5000 shares and less basket is predominantly formed by middle income earners and by in large ordinary citizens , while the investment institutions bracket is dominated by pension funds stakes with Botswana Public Officers Pension Fund(BPOPF) in the lead. The high investor pot boils by in large with wealthy select few individuals. Botswana government still holds a significant stake of 51 percent.
Sedirwa reiterated that the share price performance is influenced by various other factors that do not necessarily emanate from the company’s performance. “We still hold a record as one of the highest dividend yields on the local bourse, an investor who bought shares at IPO two years ago and has never sold their shares has so far made 33 percent return on investment, long term investors are usually unmoved by the short term volatility,” she said.
According to Sedirwa, most of share offloads are within the 5000 and less shares holding basket which is dominated by people who are generally not familiar with stock market trends. “These are usually retail investors who are by in large ordinary Batswana who sell because they are seeking a short term remedy to an immediate financial situation, some sell because they completely lack appreciation of the stock market trends and what bearing selling actually has,” she observed.
She said usually when BTCL shares are not doing well people would dispose their stakes, doing what they call exiting a “failed investment”. “This are usually retail investors who are under pressure to meet their liquidity requisites. Under these instances we would see investment institutions and wealthy individuals because of their better understanding and long term vision, buy these shares at these low prices then later enjoy handsome returns when the stock price recovers,” she noted.
The BTCL stakeholder liaison further added that some retail investors can dispose-off their shares just before the dividend pay-out, which results in new buyers being major beneficiaries. “If you sell before last day of registration then the buyer registers that transaction into their increased holding, which means during dividend pay-out the returns go to the new holder,” she said. “Not all retail investors actual understands this and they only realize after losses this an uninformed trading.”
BTCL, which made history in April 2016 by becoming Botswana’s first state owned enterprise to be privatized and the country’s first and only telecommunication company to be listed on the stock exchange, remains a profitable company with formidable asset base and positively progressing commercialisation process . The man at the helm of Megaleng House, Anthony Masunga said in several stakeholder engagements that his company is still on a transition and transformation period from being a government owned entity to fully commercialised entity.
“We continue with our journey to transform the operations of BTCL to enable sustainable growth of stakeholder value. Although BTCL transitioned from a parastatal when it converted to a public company limited by shares in 2012, the real work of transforming the operations of the business began post listing,” Masunga said at the recent results announcement. “As our shareholders expect a return on their investment, we want to deliver a solid performance focused on our two-prong strategy of both transformation and growth. The goal is to deliver to our shareholders, a fully transformed, agile and profitable company by 2020,” said Masunga.
Following a compressed 2017/18 financial year, depicted by 2 percent and 8 percent decline in revenues and profit before tax respectively, BTCL , the country’s only listed telecom outfit did not have it easy during the first half of 2018/19 financial year. The group reported another set of contracted figures in revenues and consequently shrunk profits for the six month period ended September 2018 when compared to first half of 2017.
The 12 percent decline in half year revenue attributable to a fall in mobile revenue figures and challenges with the new billing system amongst others is likely to dispatch into in overall low figures for the entire financial year which ends in March this year. However BTCL says it is a company in transition to an agile and fully commercial approach with sustainable growth patterns by 2020.
Business
LLR transforms from Company to Group reporting
Botswana Stock Exchange listed diversified real estate company, Letlole La Rona Limited (“LLR” or “the Company” or “the Group”), posted its first set of group financial statements which comprise the Company and Group consolidated accounts, which show strong financial performance for the six months ended 31 December 2023, with improvements across all key metrics.
The Company commenced the financial year with the appointment of a Deputy Chairperson, Mr Mooketsi Maphane, in order to bolster its governance and enhance leadership continuity through the development of a Board and Executive Management Succession Plan.
At operational level, LLR increased its shareholding in Railpark Mall from 32.79% to 57.79% and proudly took over the management of this prime asset.
The CEO of LLR, Ms Kamogelo Mowaneng commented “During the period under review, our portfolio continued to perform strongly, with improvements across all key metrics as a result of our ongoing focus on portfolio growth and optimisation.
“We are pleased to report a successful first half of the 2024 financial year, where we managed to not only grow the portfolio through strategic acquisitions and value accretive refurbishments but also recycled capital through the disposal of Moedi House as well as the ongoing sale of section titles at Red Square Apartments. The acquisition of an additional 25% stake in JTTM Properties significantly uplifted the value of our investment portfolio to P2.0 billion at a Group level. Our investment portfolio was further differentiated by the quality of our tenant base, as demonstrated by above market occupancy levels of 99.15% and strong collections of above 100% for the period”.
The growth in contractual revenue of 9% from the prior year’s P48.0 million to the current year P52.2 million, increased income from Railpark Mall, coupled with high collection rates, has enabled the company to declare a distribution of 9.11 thebe per linked unit, which is in line with the prior year.
In line with its strategic pillars of ‘Streamlined and Expanded Botswana Portfolio’ as well as ‘Quality African Assets’, the Group continuously monitors the performance of its investments to ensure that they meet the targeted returns.
“The Group continues to explore yield accretive opportunities for balance sheet growth and funding options that can be deployed to finance that growth” further commented the CEO of LLR Ms Kamogelo Mowaneng.
Ms Mowaneng further thanked the Group’s stakeholders for their continued support and stated that they look forward to unlocking further value in the Group.
Business
Botswana’s Electricity Generation Dips 26.4%
The Botswana Power Corporation (BPC) has reported a significant decrease in electricity generation for the fourth quarter of 2023, with output plummeting by 26.4%. This decline is primarily attributed to operational difficulties at the Morupule B power plant, as per the latest Botswana Index of Electricity Generation (IEG) released recently.
Local electricity production saw a drastic reduction, falling from 889,535 MWH in the third quarter of 2023 to 654,312 MWH in the period under review. This substantial decrease is largely due to the operational challenges at the Morupule B power plant. Consequently, the need for imported electricity surged by 35.6% (136,243 MWH) from 382,426 MWH in the third quarter to 518,669 MWH in the fourth quarter. This increase was necessitated by the need to compensate for the shortfall in locally generated electricity.
Zambia Electricity Supply Corporation Limited (ZESCO) was the principal supplier of imported electricity, accounting for 43.1% of total electricity imports during the fourth quarter of 2023. Eskom followed with 21.8%, while the remaining 12.1, 10.3, 8.6, and 4.2% were sourced from Electricidade de Mozambique (EDM), Southern African Power Pool (SAPP), Nampower, and Cross-border electricity markets, respectively. Cross-border electricity markets involve the supply of electricity to towns and villages along the border from neighboring countries such as Namibia and Zambia.
Distributed electricity exhibited a decrease of 7.8% (98,980 MWH), dropping from 1,271,961 MWH in the third quarter of 2023 to 1,172,981 MWH in the review quarter.
Electricity generated locally contributed 55.8% to the electricity distributed during the fourth quarter of 2023, a decrease from the 74.5% contribution in the same quarter of the previous year. This signifies a decrease of 18.7 percentage points. The quarter-on-quarter comparison shows that the contribution of locally generated electricity to the distributed electricity fell by 14.2 percentage points, from 69.9% in the third quarter of 2023 to 55.8% in the fourth quarter. The Morupule A and B power stations accounted for 90.4% of the electricity generated during the fourth quarter of 2023, while Matshelagabedi and Orapa emergency power plants contributed the remaining 5.9 and 3.7% respectively.
The year-on-year analysis reveals some improvement in local electricity generation. The year-on-year perspective shows that the amount of distributed electricity increased by 8.2% (88,781 MWH), from 1,084,200 MWH in the fourth quarter of 2022 to 1,172,981 MWH in the current quarter. The trend of the Index of Electricity Generation from the first quarter of 2013 to the fourth quarter of 2023 indicates an improvement in local electricity generation, despite fluctuations.
The year-on-year analysis also reveals a downward trend in the physical volume of imported electricity. The trend in the physical volume of imported electricity from the first quarter of 2013 to the fourth quarter of 2023 shows a downward trend, indicating the country’s continued effort to generate adequate electricity to meet domestic demand, has led to the decreased reliance on electricity imports.
In response to the need to increase local generation and reduce power imports, the government has initiated a new National Energy Policy. This policy is aimed at guiding the management and development of Botswana’s energy sector and encouraging investment in new and renewable energy. In the policy document, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi stated that the policy aims to transform Botswana from being a net energy importer to a self-sufficient nation with surplus energy for export into the region. Moagi expressed confidence that Botswana has the potential to achieve self-sufficiency in electric power supply, given the country’s readily available energy resources such as coal and renewable sources.
Business
MMG acquires Khoemacau in a transaction valued at P23Bn
MMG Limited, the Hong Kong-based mining company specializing in base metals, has successfully concluded the acquisition of Khoemacau Copper Mine, a state-of-the-art, world-class copper asset nestled in the northwest of Botswana.
On Monday, MMG announced that the acquisition of Khoemacau Mine in Botswana was finalized on 22nd March 2024. “This acquisition enriches the company’s portfolio with a top-tier, transformative growth project and signifies a monumental milestone in the Company’s journey,” MMG communicated in an official statement published on the Hong Kong Stock Exchange.
Upon completion of the acquisition, MMG remitted to the Sellers an Aggregate Consideration of approximately US$1,734,657,000 (over P23 billion), a sum subject to potential adjustments post-Completion.
In addition to the Aggregate Consideration, MMG, in accordance with the Agreement, advanced an aggregate amount of approximately US$348,580,000 (over P4.5 billion) as the Aggregate Debt Settlement Amount, to settle certain debt balances of the Target Group (Cuprous Capital/Khoemacau).
On November 21, 2023, Khoemacau announced that the shareholders of its parent company [Cuprous Capital] had agreed to sell 100% of their interests to MMG Limited.
MMG is a global resources company that mines, explores, and develops copper and other base metals projects on four continents. The company is headquartered in Melbourne, Australia, and has a significant shareholder, China Minmetals Corporation, which is China’s largest metals and minerals group owned by the Government of the People’s Republic of China.
On December 22, 2023, Khoemacau Copper Mining (Pty) Ltd received the approval from the Minister of Minerals and Energy of Botswana regarding the transfer of a controlling interest in the Project Licenses and Prospecting Licenses associated with the Khoemacau Copper Mine, a result of the Acquisition.
The Botswana Competition & Consumer Authority (CCA) on January 29, 2024, notified the market that it had given its approval for the takeover of Khoemacau Copper Mining by MMG Limited.
On January 29, 2024, the CCA issued a merger decision to the market, stating that after conducting all necessary assessments, it was ready to proceed.
The Competition Authority affirmed that the structure of the relevant market would not significantly change upon implementation of the proposed merger as the proposed transaction is not likely to result in a substantial lessening of competition, nor endanger the continuity of service in the market of mining of copper and silver ores and the production, and sale or supply of copper concentrate in Botswana.
Furthermore, the CCA stated that the proposed merger would not have any negative impact on public interest matters in Botswana as per the provisions of section 52(2) of the Competition Act 2018.
Earlier this month, Minister of Minerals & Energy, Lefoko Maxwell Moagi, informed parliament that his Ministry was endorsing the Khoemacau acquisition by MMG Limited. He noted that not only was the company acquiring the existing operation but also committing to an expansion program that would cost over $700 million to double production, create more jobs for Batswana, and increase taxes and royalties paid to the Government.