Connect with us
Advertisement

The DCI on recovery mode

The Botswana Stock Exchange’s Domestic Company Index (DCI) seems to have bottomed out and on its way up to recovery, heralding a change in investor sentiments. The DCI which tracks the performance of listed domestic companies has been on a downward spiral since the beginning of the year, losing 3.8% in the first quarter and followed by other declines which pushed second quarter losses to 4.74%.

On August 19th, the index hit new lows of -10.5% to end at 9506 points. However, improved market sentiments seem to have returned as shown by a one month rally that added 291 points to trade at 9797, reversing the losses by 28% . This means that the DCI is now down by -7.59%. The index’s momentum has been aided in part by some of the following listed companies that have delivered solid returns, particularly in the last 30 days, with some going from negative returns to positive returns.

Cresta

The tourism and leisure company pulled a strong performance in the last 30 days after gaining almost 8.8% to trade at P1.30, bringing its year-to-date (YTD) to 22.42%. In its latest financials for the half year, the group achieved revenue of P159.9 million, up by 6% from the corresponding period. The profit was up by 16% to P16.4 million. An interim dividend of 4 thebe has been declared, this follows the 7 thebe dividend declared for the year ended December 2015.

Cresta is recognised in the local market as the largest hotel operator both in the number of rooms (eight hotels and 724 rooms) and in the geographical spread of its hotels. There is no other hotel operator that has such a dominant presence in the larger cities in Botswana as well as the key tourist areas.

Botswana Insurance Holdings Limited

The financial services behemoth with three subsidiaries that spans the insurance and investment management sector has been a consistent performer throughout the year. BIHL share price increased slightly by 2.32% in the past 30 days, delivering a YTD of 13.22%. The share price is currently P17.21. In its interim results ended June 2016, the group posted a lower profit of P263.8 million after declining by 9%. The lower profit did not dampen the mood as the shareholders were rewarded with a dividend payout of P202.4 million after a dividend of 55 thebe.

BIHL is a financial services titan originally established in 1975.BIHL has been listed on the Botswana Stock Exchange since 1991 and is the holding company for three subsidiaries (Botswana Insurance Fund Management, Botswana Life Insurance Ltd and Legal Guard) and holds a stake in two associate companies; Letshego Holdings and Funeral Service Group as well as a 21.5% stake in Nico holdings in Malawi.

Chobe Holdings

The tourism listed group is having a good year in the local bourse trading at an all time high of P7.51, bringing the yearly returns to 10.5%. Some of the gains were realised in the past days that have rallied the index, with Chobe gaining 1.3% in that period.

Through its wholly owned subsidiaries, Chobe Holdings Limited owns and operates ten eco-tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Namibia with a combined capacity of 290 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. This year, the group, through its wholly owned subsidiary North West Air (Pty) Ltd, acquired Air Charter Botswana (Pty) Ltd’s aircraft maintenance operation at Maun International Airport.

Barclays Bank of Botswana

The bank is having its best days, churning out new products and services and delivering impressive financial results. It is not a surprise that investors have been rallying behind the company which has returned 8% in capital gains since the beginning of the year. The second largest listed bank went from P4.74 in mid-August to the current P4.86, representing gains of 2.5%. Barclays could also lay claim to be the only listed bank that has delivered positive returns to shareholders so far this year. Moreover, in the group’s half year results ended June 2016, the bank’s profit  before tax went up to P270 million, an increase of 144% from the corresponding period. As a further reward to shareholders, the bank has declared a dividend of 14.67 thebe which translates into a P125 million payout.

Engen

The company is staging a comeback in what has been so far a dismal performance in the stock market. Engen was one of the companies that were pulling down the DCI after its share price declined by 6% in the first quarter of the year. However by August the company had cut its share losses to just 2.5%. The upward trajectory continued in the last 30 days, with the share price moving from P8.30 to P9.20, gaining 10.4% to trade at all time high and delivering a YTD of 8.1%. The sudden positive momentum has been shadowed by the company’s latest cautionary note that warns of lower earnings in their upcoming interim results ended June 2016.

Engen is a petroleum company specializing in fuels and lubricants sales and distribution. It operates filling stations nationwide to service the retail market. Primary customers are the mines, government, parastatals, construction and transport sector.

G4S

This is one company that is also on the comeback trail after hitting lows of -0.6% in August. The security company pulled back with a stellar share price performance in the past 30 days, going from P3.62 to P3.85, representing gains of 6.35% since the beginning of the year. The share price is at an all time high. The group’s profit was up by 6.4% to P15.4 million in their recent interim results ended June 2016. An interim dividend of 11.36 thebe was declared.

G4S is the world’s leading international security solutions group, which specialises in outsourced business processes such as manned security, secure monitoring and response, cash management solutions and facilities management.

Continue Reading

Business

The  Bulb World CEO selected for Africa’s prestigious award

22nd July 2021

The Bulb World Chief Executive Officer (CEO) and entrepreneur, Ketshephaone Jacob has been selected as a 2021 Top 50 Africa’s Business Hero.

Jacob was chosen from a pool of 12,000 applicants – many of whom are highly-skilled and accomplished entrepreneurs.

Africa’s Business Hero, sponsored by technology entrepreneur, Jack Ma, aims to identify, support and inspire the next generation of African entrepreneurs who are making a difference in their local communities, working to solve the most pressing problems, and building a more sustainable and inclusive economy for the future.

The initiative is as inclusive as possible and applications were open in English and French to entrepreneurs from all African countries, all sectors, and all ages who operate businesses formally registered and headquartered in an African country, and that have a 3 year-track record.

Every year, finalists are selected to compete in the ABH finale pitch competition and participate in a TV Show that will be broadcast online and across the continent.

The finalists will compete for a share of US $1.5 million in grant money.

The Bulb World, is home grown LED light manufacturing company, which was partly funded by Citizen Entrepreneurial Development Agency (CEDA) at the tune of P4 million, to manufacture LED lighting bulbs for both commercial and residential use in 2017.

The Bulb World operate from the Special Economic Zone of Selibe Phikwe. Early this year, The BulB World announced its expansion to South Africa, setting in motion its ambitious Africa expansion plan.

Continue Reading

Business

Mining production down 12 % IN Q1 2021

14th July 2021

During the first quarter of 2021, production in Botswana’s economic nucleus- the mining sector contracted by 12 percent. This is according to Mining Production Index released by Statistics Botswana this week.

The country’s central data body revealed that Index of Mining production stood at 74.4 during the first quarter of 2021, showing a negative year on-year growth of 12.0 percent, from 84.6 registered during the first quarter of 2020.

The main contributor to the decline in mining production came from the Diamonds sector, which contributed negative 11.7 percentage points. Soda Ash was the only positive contributor in the mining production, contributing 0.1 of a percentage point. However Soda Ash’s contribution was insignificant to offset the negative contribution made by Diamonds.

The quarter-on-quarter analysis by Statistics Botswana experts shows an increase of 16.3 percent from the index of 64.0 during the fourth quarter of 2020 to 74.4 observed during the period under review.

Diamond production decreased by 12.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. The decrease was as a result of planned strategy to align production with weaker trading conditions mostly linked to Covid-19 protocols restrictions.

Botswana’s diamond sector is underpinned by Debswana, the country’s flagship rough producer- a 50-50 joint venture between government and global mining giant De Beers Group. The other producer is Canadian based Lucara Diamond Corp through its wholly owned Karowe Mine which is a relatively small but significant production that has made a name for itself worldwide with rare diamond recoveries of unprecedented carat size.

On the other hand, quarter-on quarter analysis shows that production has improved, registering a positive growth of 17.5 percent during the first quarter of 2021 compared to the preceding quarter – 2020 Q4.

Though production was significantly lower in the first quarter, the two producers ended Q2 with rare diamond recoveries. Debswana early last month found the world’s third largest gem diamond – weighing 1098 carat at Jwaneng Mine, its flagship gem quality diamonds producer, also regarded the world’s richest diamond mine.

A week later Lucara  announced its second biggest recovery, the 1174 carat clivage near-gem dug from its Karowe Mine. The diamond is the world third in carat size after the plus-3000 carat Cullinan found in South Africa back in 1905 and the 1758 carat Sewelo unearthed at its Karowe mine in 2019. Debswana and Lucara are investing billions of pulas in underground mining projects to extend the life of its mines, Jwaneng & Karowe respectively.

In terms of Gold which is produced at Mupani mine near Botswana’s second city of Francistown output decreased by 17.9 percent during the first quarter of 2021 compared to the same quarter of the previous year.

Similarly, quarter-on-quarter analysis reflects that production decreased by 21.4 percent during the first quarter of 2021, compared to the preceding quarter. The decrease was as a result of the deteriorating lifespan of the mine as well as the impact of COVID-19 which slowed down the mining activities.

Soda Ash production increased by 11.1 percent during the first quarter of 2021 compared to the same quarter of the previous year. In terms of quarter-on-quarter Soda Ash production also showed an increase, picking up by 2.1 percent during the period under review. The increase in production is attributable to the effectiveness of the plant following refurbishment which occurred in the third quarter of 2020.

Salt production decreased by 34.0 percent during the first quarter of 2021, compared to the same quarter of the previous year. Similarly, the quarter-on-quarter analysis shows that salt production registered a decrease of 32.9 percent during the period under review. Both salt and Sodash are produced by partly government owned Botswana Ash (BotsAsh) operating from Sowa town near Makgadikgadi pans.

Coal production decreased by 11.2 percent during the first quarter of 2021, compared to the corresponding quarter of the previous year. The decrease was attributed to the reduced demand from Morupule B Power Station following the remedial works being undertaken, as one boiler was in operation during the period under review.

Although production fell, Statistics Botswana says there was no shortfall in supply of coal due to stockpiling. On the other hand, the quarter-on-quarter comparison shows that coal production increased by 20.4 percent compared to the preceding quarter.

Botswana’s flagship coal producer is Morupule Coal Mine; a wholly state owned mining company located in Palapye producing primarily for Botswana Power Corporation (BPC)’s power generation plants Morupule A & B.

The other coal producer is Botswana Stock Exchange listed Minergy which operates a 390 MT Coal Resource mine in Masama near Media in the southwestern edge of the Mmamabula Coalfields.

Continue Reading

Business

Gov’t awards mining licence for Gantsi Copper Mine

14th July 2021
Moagi

Department of Mines in the Ministry of Mineral Resources, Green Technology & Energy Security has awarded mining licence to Tshukudu Metals-a subsidiary of Aussie firm Sandfire Resources ,giving the company a green light to start piecing the ground at its Motheo Copper Project near Gantsi.

Lefoko Moagi, minister in charge of mineral resources in Botswana confirmed to weekendpost on Tuesday. Minister Moagi revealed that “the licence has been approved , but Sandfire Resources as a listed company will report to its shareholders and investors then make an official public statement” he said.

Based on a forecast copper price of US$3.16/lb (reflecting current long-term consensus pricing) the Base Case 3.2Mtpa – Ghantsi copper project is forecast to generate US$664 million (over P7 billion) in pre-tax free cash-flow and US$987 million (over P10 billion) in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), at a forecast all-in sustaining cost of US$1.76/lb over its first 10 years of operations.

In December 2020, the Board of Sandfire Resources approved the commercial development of the Motheo Copper Mine located in the Kalahari Copper Belt in Botswana, marking a key step in its transformation into a global, diversified, and sustainable mining company.

Tshukudu Metals Botswana (Pty) Limited (Tshukudu) a 100% owned subsidiary will be the owner and operator of the Motheo Copper Mine which is scheduled to produce up to 30,000 tonnes per annum of copper in concentrate over a 12 year mine life.TMB is targeting development of its Motheo Copper Mine in 2021 and 2022, with its first production in 2023.

GOVERNMENT NOT TAKING UP 15 % STAKE ON OFFER

Beginning of this year presentations were made to the Department of Mines as part of the Mining Licence approval process and to the Ghanzi Regional Council, additional information was requested by Department of Mines in April and was duly supplied by the company.

As part of the Mining Licence approval process, the Government of Botswana has a right to acquire up to a 15% fully contributing interest in all mining projects locally. Quizzed on whether government through Mineral Development Corporation Botswana (MDCB) would be taking up stake in the project Minister Moagi said, “No consideration is being made on that regard”.

“Government is not considering taking up a stake in the Ghantsi Copper Mine project, every opportunity is assessed on all risks, but Government makes money all the while from leases, taxes and royalties, remember if you take stake you are liable for liabilities of the project as well,” Moagi said.

MINING CONTRACT

Last month Sandfire announced that it has awarded over P5 billion worth mining contract to African Mining Services (AMS), a subsidiary of Perenti, to deliver the open cast operation.

The contract, which has an estimated value of US$496 million (over 5 billion), is the largest single operational contract for the new Motheo Project covering a period of 7 years and 3 months, with provision for a one-year extension.

The contract according to Sandfire Resources was awarded following a competitive 3-stage tender process which saw a number of key factors taken into consideration when selecting the preferred contractor.

These included Citizen Economic Empowerment, safety culture, equipment suitability and availability, commercial terms and identified improvement opportunities. Under the terms of the contract, AMS has agreed to form a 70:30 Joint Venture with a suitable local Botswana partner or partners.

The JV is expected to be finalized ahead of commencement of mining in early 2022. African Mining Services has been operating in Africa for over 30 years. AMS’ parent company, ASX listed diversified mining services group Perenti, already has a presence in Botswana through Barminco, their underground mining division, at the large-scale Khoemacau Copper Mine located 200km north-east of Motheo.

Last month Sandfire executives said the award of the open pit mining contract represents another key milestone in advancing the Motheo Project towards production, with all components of the contract in line with the key parameters outlined in the December 2020 Definitive Feasibility Study (DFS).

The company said full-scale construction of the US$279 million (over P 3 billion ) mine development is expected to commence immediately upon receipt of the Mining Licence, with mining scheduled to commence in early 2022 ahead of first production in early 2023. This week Sandfire Resources advertised over 10 positions in calling on applications from geologists, mining engineers and geotechnical engineers.

The Motheo mine has an initial mine life of 12.5 years based on production from the T3 pit. The initial development is expected to generate approximately 1,000 jobs during the construction phase and 600 direct full-time jobs during operations, with at least 95% of the total mine workforce expected to be made of up of Botswana citizens.

Later in the week Sandfire Resources announced in the company website that it has received the licence. Sandfire’s Managing Director and CEO, Mr Karl Simich, said the award of the Mining Licence represented a major milestone that would see a significant increase in construction and development activities on site.

“We are absolutely delighted to now be in a position to move to full-scale construction at Motheo, with our construction crews expected to mobilise to site over the next few days. I would like to thank the Government of Botswana for their support throughout the approvals process, which will see Motheo come on-stream in 2023 as one of very few new copper mines commencing production globally.”

Simich said the project is expected to generate approximately 1,000 jobs during construction and 600 full-time jobs during operations, and represents the foundation for Sandfire’s long-term growth plans in Botswana.

“Our vision is that Motheo will form the centre of a new, long-life copper production hub in in the central portion of the world-class Kalahari Copper Belt, where we hold an extensive ground-holding spanning Botswana and Namibia,” he said.

Continue Reading
Do NOT follow this link or you will be banned from the site!