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New acquisition boosts RDC revenue, diversifies portfolio

RDC Properties, the diversified property & real estate group listed on the Botswana Stock Exchange(BSE) has cashed in big from its recently acquired property, registering a near double and triple growth in investment portfolio and revenue, the company said on Thursday in the financial results for the half year period ended 30 June 2022.

The value of the investment portfolio increased by 148% to P5.8 billion and revenue increased by 244% to P249.7 million, predominately as a result of the acquisition of the Tower portfolio.

RDC Executive Chairman Guido Renato Giachetti said the acquisition has diversified the Group’s portfolio in terms of sector and location, reducing exposure to hospitality and offices and introducing some premium retail assets located in South Africa and Croatia.

Profit from operations increased by 213% to P142.4 million and profit attributable to shareholders by 210% to P59.8 million over the same period.RDC explained that the increase in profit attributable to shareholders is because of the Tower acquisition, the fair value gains on interest rate swaps and the strengthening of the Rand.

The Group has largely been protected from the increasing interest rate environment, as 46% of the debt is hedged. Following the acquisition of Tower, the Group has maintained a loan-to-value ratio of 46%.

Guido Renato Giachetti revealed in a commentary alongside the financials that Standard Bank RSA, Tower’s principal bankers, has renewed the financing of the portfolio and indicated confidence in the new management team.

“It is management’s focus to reduce the gearing over the medium-term and focus on cash flow. We are confident that striking the correct balance between Growth and Value assets within the portfolio in the 3 years’ time horizon will lay the foundations to maintain and improve RDCP’s current Financial Metrics.” He said

Giachetti explained that the purpose of acquiring the Tower Property Fund Limited, a large and diversified portfolio at a substantial discount to NAV is an opportunity for RDC to substantially improve the portfolio in the years to come.

He shared that during the period under review RDC was busy with the re-engineering of the whole management company, re-deploying all Tower management and staff into the newly formed subsidiary of Property and Asset Management in RSA, Notwane Asset Management (Pty) Ltd, aligning of systems and processes across countries and creating a sense of belonging within the RDC Properties Group.

“The consolidation and integration of the teams has run extremely smoothly. We have been able to apply the new, combined skills of the team to the benefit of our portfolio. Having such a large portfolio and a wide pool of skills has enabled us to evaluate the performance of each asset and set preliminary actions to redress underperformances and initiate a process of optimisation of the portfolio and alignment to our purpose” he said

Giachetti said the focus is to improve the performance of key assets, dispose of non-core assets and unlock value across the portfolio. Proceeds from sales will be re-deployed in reducing debt, enhancing the performance of key assets and re-investing.

During the period, RDC offloaded a few smaller assets, namely Cleveland, Woodlands and Section 15 of Coachmans Crossing Block D at a value that is substantially higher than the price paid for them.

The repurposing of some properties is under way: Upper Grayston Block B, which is an office block that has been vacant for years is now being rented as a wellness and mental health clinic, the Link Hill Shopping Centre (KZN) and Westlake Lifestyle Centre (WP) are in the process of being substantially re-developed.

The Botswana portfolio, with exception of the hospitality assets, has performed well within budget with a positive leasing activity (11,034m2 of new lettings), and collections have improved with the lifting of Covid 19 restrictions.

Guido Renato Giachetti observed that the hospitality and entertainment business was under a lot of pressure in the first quarter due to the Omicron variant, noting that however the sector is showing a positive rebound.

“We anticipate the leisure market to return to pre-Covid levels next year and the corporate market to take longer”

He noted that the major focus in South Africa has been evaluating the newly acquired portfolio situated in Cape Town, Gauteng and KZN. PAM has on-the-ground management in each of these regions, and the respective asset managers have integrated into an efficient and effective team.

The Radisson Red Hotel in Johannesburg, has steadily increased its occupancies and rates over the reporting period. Current occupancies are up to 60%. The hotel is performing very well considering that it is newly built and trading out of a Covid period.

RDC’s Croatian assets continue to perform well, and the majority are underpinned by blue-chip triple net leases. The region has some encouraging growth prospects with its imminent (1 Jan 2023) full EU membership status and move onto the Common Monetary System (Euro).

“Our rental enterprise in the USA continues to perform according to forecast and we have received a few offers to purchase that we are evaluating. Our development property, The Manning, is reaching practical completion with the expected realisation of this investment expected in Q1 2023,” said Guido Renato Giachetti.

 

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Business

Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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