Bihl group asset value continues to rise amidst difficult operating environment

Catherine Lesedi-Letegele

In the midst of shock waves in the Botswana economy, top Botswana Stock Exchange listed financial entity, BIHL Group, continues to retain its position as Botswana’s leading insurance operation. Continuing on its twin strategy to drive growth and profitability, the group pursued its diversification approach further in 2016, that included expanding its reach locally and across Southern Africa. Results for the year ended 31 December 2016 testify of this continued strength, as the group’s embedded value increased by 4% to P4.4 billion. The results point to continued strong performance across the group, set against a climate of economic volatility, both at home and abroad.
“The financial sector in particular has been operating in an increasingly difficult economic environment. Despite these real external forces faced, we have successfully returned strong shareholder value and continued to introduce several solutions to the market, especially in the life insurance business. Another way we maintained our stability and drove profits included with our diversification of the group, where we concluded major acquisitions in the SADC region. In the year under review we successfully expanded into 5 other markets namely Uganda, Mozambique, Zambia, Tanzania and Malawi, through our 25.1% shareholding in Nico Malawi Holdings,” noted BIHL group CEO, Mrs. Catherine Lesetedi-Letegele.
Key financial highlights shared include:
•     Group embedded value increased to P4.4 billion from P4.2 billion in 2015. This allowed for a P342.9 million dividend pay-out, a 22% increase from P281.1 million dividends paid in 2015.
•     Investments in associates and joint ventures increased by 7% from P1.74 billion to P1.86 billion
•    Final dividend proposed of P188.3 million (gross of tax) increased from P188 million in 2015
•     Group revenues stood at P2.1 billion from P2.4 billion in the corresponding period, a slight decrease of 14%.
Overall, share of profit of associates increased by 20% due to increased shareholding in associates Funeral Services group (FSG) and Letshego Holdings Limited (Letshego) and positive results from new investments in Botswana Insurance Company Limited. The group furthered its diversification approach, using the group’s shareholder investment portfolio to make greater investments into the region. These included acquiring a 50% stake in Teledimo Pty, a company owning Botswana Insurance Company, the leading & oldest short term insurance company in Botswana. The group acquired a 25.1% stake in Nico Malawi Holdings.
The asset management business achieved stronger results in 2016 despite a turbulent year. Operating profit for the year showed a 4% year on year increase due to the strong growth in fee related income from Bifm and the favourable exchange rate for the year which positively affected results from the Zambia business. During the latter part of the year, Assets Under Management for the year grew 22% to P25.9 billion which is made up of P22.2 billion from Bifm Botswana and P3.7 billion from Zambia operations.
Concluded Mrs. Lesetedi-Letegele, “Despite these uncertain times, we continue to yield growth and sustain profitability across the business in alignment with out strategy. We will continue to deliver strong returns and value, providing wholesome financial solutions, underpinned by innovation. It is important to note that as one of the largest financial services providers in the country, we remain committed to not only driving strong returns and quality financial services but to also make a sustainable impact in the communities we operate. In the midst of a challenging environment we remain confident that Botswana and the global markets will stabilise, as we press on with our agenda to become a fully-fledged financial services operation.”