BIHL sheds a whopping P110m
Shareholders of the blue-chip insurance company, the Botswana Insurance Holdings Limited (BIHL) Group will lose up to P110 million, which will be wiped off from the company’s profits, an announcement of the Botswana Stock Exchange (BSE) shows.
The Board of the BIHL Group, headed by Chairperson Batsho Dambe-Groth announced on Botswana Stock Exchange (BSE) that the Group’s interim results for the half-year period ended 30 June 2019 will be lower than those reported for the six-month period ended 30 June 2018 by between 25 percent to 35 percent, which in number terms is a reduction ranging from P78 million to P110 million.
According to the gigantic financial services firm, the profit before tax for the six-month period ended 30 June 2018 was P314 million. It will however shrink down to just a little over P200 million.
“The reason for the lower earnings during the current period is due to a fair value adjustment in respect of the Group’s investments in associates. The Board is pleased to note, however, that the core earnings from the significant subsidiaries in the Group remained strong despite a difficult trading environment,” the board announced.
During the 2018 full year, profit from the Botswana Insurance Holdings Limited (BIHL) associate companies declined by 28 percent driven mostly by the high taxes paid by Letshego Holdings Limited, which heavily reduced the profit after tax and consequently the share due to BIHL.
BIHL, a behemoth financial services outfit owns 26.17 percent of Letshego Holdings Limited, 35.6 percent in the largest undertakers Funeral Services Group (FSG), 50 percent in Botswana Insurance Company (BIC) Limited and 25.1 percent in Nico Holdings Limited in Malawi. As a shareholder in these companies, BIHL gets dividends from these companies which are then accounted for as ‘Profit from associates’, in the BIHL financials. For the full year ended 31 December 2018, BIHL, an institution under the stewardship of Catherine Lesetedi-Letegele made P52.8 million from its associate companies. The money was however 28 percent lower than the one garnered in the previous corresponding period, which was P72.9 million.
Amongst the BIHL associates, Letshego is the biggest by profitability and market value. It also contributes more money to the BIHL profit from associates, than any other associate. So any change in Letshego profitability would impact BIHL ‘profit from associates.
The Group’s results for the half- year period ended 30 June 2019 are expected to be published on or around the 2nd of September 2019.
The Listings Requirements of the Botswana Stock Exchange (BSE) require BIHL to announce through the BSE and the press any circumstances or events that have, or are likely to have, a material effect on the financial results of the company for the period to be reported upon next.