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Friday, 19 April 2024

RDC revenue shoots to P66 million

Business

Botswana conceived and listed property outfit RDC realised proliferated revenue for the half-year ended June 2018, the Botswana Stock Exchange (BSE) listed group reports.

 According to the company’s financials released this week  the real estate group which  owns properties  in  Mozambique and South Africa amongst  other regional  markets accrued over P66 million pula in revenue for the six month ended June 2018 compared to  43 million registered during  the corresponding  period  ended June 2017  , mirroring over 50 percent  increase.

 This also output satisfactory figures of 26 % climb in profits for the period. Over 35 million was recorded as profits for the period under review compared to 28 million gathered in the corresponding period last year. According to Guido Giachetti the Executive Chairman of RDC which owns amongst other lucrative properties , the Masa Square Hotel building in Central Business District(CBD) Gaborone ,the good results realized by his company are underpinned by  in large the stable Botswana portfolio and  significantly the solid performance of the Capitalgro portfolio in South Africa.

Capitalgro acquired The Edge building on 20 March 2018 which runs at 100 percent occupancy rate, at a total acquisition cost of R307 million (about P227 million), financed through a bank mortgage loan and a Capitalgro rights issue. Giachetti reveals that RDC R120 million (P88.8 million) participation to the rights issue resulted in the company‘s shareholding in Capitalgro increasing from 34.8 percent to 62.9 percent.

 “We are presently evaluating a number of opportunities presented to the Capitalgro team and we are confident of the prime portfolio that we are building in the Cape Town area,” he said. The company which is one of Botswana‘s first  real estate and the country‘s first listed property company also continued to implement its regional expansion plan through this period.RDC also reports satisfactory progress on leasing activities at its ICC Flats in Extension 9 Gaborone.

According to the Global Property Guide (GPG) the Botswana's residential property market remains largely underdeveloped, but carrying huge growth potential.  “Because of the absence of official and timely house price statistics in Botswana, it is difficult to analyze the market, but local real estate experts say that house prices in the country have continued to rise in recent years,” states the global property organisation in their annual report released recently .

GPG observes that the relative lack of housing supply has led to high rental yields in Botswana, according to research they conducted in 2017, suggesting that yields of 6.5 percent to 9.5 percent can be enjoyed on residential property in Gaborone and Francistown.

This is supported by a recent research conducted by Centre for Affordable Housing Finance in Africa (CAHF), which shows that rental properties in the city centre currently offer high gross rental yields of 7.9 percent Residential properties located outside the city centre also offer healthy rental yields of about 5.5 percent. RDC states that going forward the company will explore potential expansion avenues of its residential portfolio which occupies 3 percent of its total business.

 “We are evaluating a few other development opportunities in the local market,” the report highlighted. On the regional portfolio, for its Mozambique property division the company also reports satisfactory performance and expansion progress. “We are pleased to report that Xai Xai shopping centre building works have been completed and the anchor tenant is expected to commence their fit-out as soon as possible. The advanced earthworks have commenced at the Zimpeto project; this is expected to be a 24 months project. We also continue to explore other opportunities in Mozambique,” explained the RDC Executive Chairman.  

The report highlighted that in the Namibian market which the company recently expanded to, the construction of several buildings was awaiting relevant authorities approval.  “We expect to imminently start building works for the convenience centres in Tsumeb and Grootfontein after the ministerial approval of the land transfer and finalisation of the deeds of sale.”

The company further hopes to convert proceeds sales from their interest on the City Lights project in the United States of America into a yielding portfolio. The RDC board declared a distribution to linked unit holders of 0.124 thebe per ordinary share as interim dividend as well as interest of 6.206 thebe per debenture . RDC Properties, a Developer and Property Investment company is the first property listed company on the Botswana Stock Exchange. 1996.

The Company holds income-generating investments in properties and also carries out property developments. The property portfolio includes landmark properties such as:  Masa Centre; Standard Chartered House, Chobe Marina Lodge, Isalo Rock Lodge, and many others situated all over Botswana and in Madagascar.

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Business

LLR transforms from Company to Group reporting

9th April 2024

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.

 

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Business

Botswana’s Electricity Generation Dips 26.4%

9th April 2024

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.

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Business

MMG acquires Khoemacau in a transaction valued at P23Bn

9th April 2024

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.

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