Retrenchments, Stolen Copper Depress BTC Performance

Retrenchments cost the telco P67m while the total impact of copper cable theft amounted to P29m

GAZETTE REPORTER

Orange

For the half-year ended 30 September 2022, the performance of Botswana Telecommunications Corporation Limited (BTC) was subdued due to difficult macro-economic conditions, as well as a one off provision for restructuring costs and escalation in replacement costs for stolen copper from the company’s network, The Botswana Gazette has established.

According to the Chairperson of the BSE-listed telecommunications giant Lorato Boakgomo-Ntakhwana and Managing Director Anthony Masunga in the company’s financial results for the period under review (released recently), the total impact of copper cable theft amounted to P29 million.

“The company has since intensified efforts and increased its capital budget towards building alternative technologies to replace the copper network investments,” the two wrote.

Restructuring
“The once-off provision of P67 million for the organisational restructuring drove the increase in the operating expenditure. The primary objectives of the organisational restructuring include the creation of a more fit-for-purpose organisation that supports the strategic repositioning of the business into the future.

“Furthermore, the exercise ensures that the company has the right human capital in the right jobs that will contribute towards the future viability and long-term financial sustainability of the company.”

P691m revenue
This is the company that recorded revenue of P691 million during the period under review. Profit after tax amounted to P22 million whereas data services and mobile financial services revenue growth momentum continued but was partially offset by a decline in performance of voice services.

The cost of sales reduced by only 2 percent (normalised basis 11 percent), thus leading to gross profit being level with the prior year. The pressure on costs led to EBITDA declining by 13 percent to P144 million.

The company delivered healthy cash and cash equivalents that resulted in an increase of P96 million, reflecting a 67 percent cash conversion.

The future
Looking into the future, Boakgomo-Ntakhwana and Masunga note that despite the uncertainty of the economy, BTC will intensify efforts to improve its financial and operational performance by seizing opportunities available in the market.
“The company will continue to drive data and value offers in the market as we accommodate the shifts in demand and usage patterns (i.e. from voice to data driven services),” they say.

“We will continue to migrate customers off legacy technologies so that they can experience faster and more reliable fixed and mobile data. We are determined to improve localities and communities through our network and services that we offer.”
They note that the infrastructure that BTC has invested in from mobile, fixed, VSAT to a data centre is a great foundation for driving digital services, cloud services and fintech services.

Digital transformation
“The company will continue to pursue its digital transformation programme and create more value for our customers through our services and innovative solutions,” they say.
“BTC is focusing on driving its customers to use more of our digital platforms for convenience and the ability to get our services and offers anywhere and any time.
“The company will further drive its efficiency improvement programme as way of optimising our cost structure and responding to changing market dynamics.”