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Impairments dent BancABC performance

Acting group CEO Dr. Blessing Mudavanhu

BancABC has this week said that impairments were largely to blame for a P438 million slip in profit for the financial year ended December 2014. The Pan African bank is striving to set a firm base for future solid growth.

The group recorded an attributable loss of P438 million compared to an attributable profit of P 198 million in 2013. This was largely due to impairments, reduced margins and increased operating expense.

Acting group CEO Dr. Blessing Mudavanhu said the huge loss was largely due to “The shareholders’ initiative, a project management took up as a way to starting on a new slate.

Mudavanhu noted that though the group has incurred a huge loss, the economic value of the countries the bank operates in was more important to the shareholder, as it is in good standing and “very liquid”.

Atlas Mara raised $225 million in credit lines since it acquired a 98, 7 percent stake in ABC Holdings limited. “The major benefits of the investments include access to more funding,” Mudavanhu said.

The CEO further revealed that the several significant events that occurred during 2014 will place the bank in more favorable position for strong growth during the current financial year and beyond.

“The bulk of the credit impairment charges incurred during 2014 were however primarily once off and should be seen as part of the group’s conservative approach towards managing credit risk,” he said.

The group’s balance sheet remains strong, customer deposits increased by 16 percent. The extra funding was deployed mostly into liquid assets and to a lesser extent loans and advances.

For the period under review BancABC Botswana attributable profit of P71 million was 53% lower than what was achieved in 2013. Performance was impacted by a decline net interest margins as well as impairments which increased from 42 million in 2013 to 110 million in 2014. However the quality of the loan book remained relatively stable with the gross ratio of 3.9%.

BancABC Mozambique recorded attributable loss of 14 million compared to attributable profit of 9 million in 2013 this was largely due to growth in operating expenses which emanated from BancABC’S strategy of expanding its throughout the country.

BancABC Tanzania posted an attributable loss of P 14million compared to an attributable profit of P20 million largely due to a mix of higher impairments, lower trading income as well as increased operating expenses in the year under review.

The subsidiary loan book grew by 13% from 575 million to 650 million with the retail portion of the loan book growing from 27%n in 2013 to 47% in 2014.Deposits marginally declined from 1,299 million to 1,284 million in the current year.

BancABC Zambia attributable profit declined from P50 million in 2013 to P4 million in 2014. The major causes of the decline in profitability were the reduction in interest’s margins as well as increased impairments. The entity’s loan book marginally declined by 3% from 1.39 billion to 1.8 billion.

BancABC Zimbabwe posted an attributable loss of 3 million compared to an attributable profit of 118 million in 2013. This was largely due to impairments.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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