A one-year turnaround restored BDC to profit as stronger income, tighter costs, asset recycling and lower impairments reversed the previous year’s losses.
BONGANI MALUNGA
The Botswana Development Corporation (BDC) has returned to profitability after an aggressive one-year turnaround programme reversed a P171 million loss and restored the state investment company to the black.
BACK IN BLACK
For the financial year ended 30 June 2026, BDC recorded P14 million profit before tax, which it said represented a P191 million turnaround from the P171 million loss posted in the previous financial year. Profit after tax reached P20.5 million, compared with a P167.7 million loss in FY2025.
The Corporation described the recovery as the result of a deliberate turnaround programme implemented under close board supervision.
“FY2026 marked BDC’s return to profitability, the result of concerted efforts by the management team, under close Board oversight, to execute an aggressive turnaround plan within a single financial year,” BDC stated in its financials for the year ended 30 June 2026.
INCOME REBOUND
The rebound was driven by stronger income, tighter cost control and lower credit-related charges. BDC’s total company income rose 11 percent to P485 million from P437 million a year earlier, while operating expenses fell 4 percent to P147 million. Combined credit and valuation charges also fell sharply as the Corporation strengthened recovery efforts and cleaned up problematic exposures.
Dividend income was a major contributor, jumping to P239 million from P78 million. BDC said this included proceeds generated from the disposal of property at subsidiary level under its asset recycling programme.
ASSET RECYCLING
BDC has increasingly turned to asset recycling, disposing of underperforming or non-core assets and redirecting the capital into new investments. During FY2026, the programme released P614 million for debt servicing and reinvestment into the investment pipeline.
The Corporation also tightened the quality of reported earnings. Interest income from loans fell to P142 million from P263 million after management deliberately stopped accruing interest on non-performing loans. BDC said the move was intended to ensure that income reflects money it reasonably expects to collect, while outstanding amounts continue to be pursued through recovery processes.
Expected credit losses at company level dropped 62 percent to P45 million from P119 million, following what BDC described as intensified workout and recovery efforts and stronger portfolio monitoring.
NEW MONEY
The cleanup of the old book was accompanied by a sharp acceleration in new investment. BDC disbursed P855 million during FY2026, nearly 20 times the previous year’s level. Of that amount, 62 percent went to established, cash-generative counterparties, while company investment assets grew 9 percent to P3.2 billion.
Liquidity also strengthened considerably. BDC moved from an overdrawn cash position of P22 million to positive company cash, while operating activities generated P59 million compared with a P169 million outflow in the previous year. Group cash climbed to P345 million from P77 million.
GROUP LAGS
However, the turnaround has not yet fully filtered through to the consolidated BDC Group. While the Corporation returned to profit, the Group recorded a P22 million loss before tax and a P78 million loss after tax, largely reflecting weaker conferencing activity and subsidiaries that are still building towards full operating capacity. Group operating profit nevertheless remained positive at P78 million.
BDC says FY2027 will focus on extending the turnaround to the Group through individual value-creation plans for portfolio companies, improved operating performance, stronger governance and scaling businesses that remain in their ramp-up phase.
The Corporation enters that phase with a P1.63 billion active investment pipeline and plans to deploy a further P1.39 billion over the next two years across manufacturing, energy, agriculture, healthcare, hospitality, financial services and technology.