Botswana Housing Corporation has sprung back to profitability for the six-months results to September 2016 as a result of cost cutting measures and impressive performance from income received from joint ventures.
The state-owned BHC posted a marginal surplus of P2, 7 million during the period under review, a major improvement when compared to a loss of P7, 4 million. The above profit represents a growth of 137 percent when compared to the same period last month. The Reginald Motswaiso-led Corporation has not mentioned the joint venture properties or projects which boosted their bottom line.
The BHC Act allows the company to partner with local companies to develop new properties in whatever arrangements the parties deem fit. Meanwhile, the corporation has started the construction of more than 300 houses in Gaborone, Palapye, Jwaneng, and Phakalane. “These are areas where effective demand has been established and the houses are expected to attract huge interest from the market,” said BHC in a statement accompanying its financial results.
A decision has been taken to build and sell more houses instead of renting out. This is expected to prop-up BHC’s balance sheet which has assets of well over P3 billion. The parastatal has not adjusted its rates in the past ten years. Its application for rental increases has been rejected several times by the ministry responsible for housing. The company improving balance sheet and reduction in long term debt gives it an opportunity to borrow from the market to deliver more houses.
On other matters, BHC is currently restructuring its operations to align its staff needs to the new strategy. According to media reports, more than 100 jobs are on the line at the Gaborone based company, which has properties all over the country. Chief Executive of the company, Motswaiso has also written to the staff to inform them about the looming job losses. “The assessment process has resulted with some employees being redundant because they did not satisfy the assessment criteria and / or their jobs/ positions are redundant hence no longer in the establishment,” Motswaiso reportedly told employees in a memo last week.