Botswana Housing Corporation’s (BHC) revenue grew by 10 percent in the 2011/12 financial year despite rental tariffs being stable in more than seven years.
The Reginald Motswaiso-led corporation raked in an income of P342 million (P312: 2011) said the company’s annual report released recently. “Rental income grew by 8% despite the stagnant rentals charged by the corporation in relation to costs of input,” said a statement accompanying its financial statement.
At the time of going to press on Wednesday, Mookodi Seisa, the corporation’s Corporate and Public Affairs Manager, had not responded to BG Business questions on whether the corporation has written to government about adjustment this financial year.
Previous attempts by the corporation to review rental tariffs were rejected by government, it has been established. The company also complained that the current economic climate, land unavailability (in strategic areas and high infrastructure costs) continues to work against them.
Despite all these factors, the corporation was able to grow revenue partly because of rentals from new houses and outright sales of property to clients. House sales revenue grew by a convincing 34 percent in the 2011/12 financial year, said Motswaiso, but cost of houses sold jumped by 59 percent.
The result was a drop in profit margins. 283 houses were sold in the period under review, said the company’s annual report. During the year, the BHC completed 1,096 houses with some still to be occupied due to the unavailability of utilities.
On a related matter, Chairperson of BHC board of directors Bolelang Pheko explained that their citizen empowerment initiatives are bearing fruits. During the year, citizen owned companies won tenders amounting to P144 million, while foreign firms received P126 million.
In the past financial year, the company also introduced cost cutting measures, which however failed to help, as BHC missed its net surplus by 3 percent. The corporation had budgeted for a net surplus of P51, 8 million but ended up realising P50, 5 million. Total assets of the company jumped by 3 percent to P2, 6 billion.