BHC revenue on the decline

27th September 2017
BHC houses Source:The Midweek Sun


By Sun Reporter - Reporter

The Botswana Housing Corporation’s total revenue for the financial year ended 31stMarch 2017 has recorded a nine percent decline. The Corporation’s total revenues reached a low of P493 million, when compared to the P539 million recorded in the prior year. According to the Corporation’s financial statement by its General Manager, Reginald Motswaiso, the decrease was mainly driven by sales revenue which decreased by a significant P43 million or 13 percent, from P326 million to P284 million.

In the prior year, sales revenue was high in comparison with other years and the largest contributor was the Phakalane project. “The Phakalane project was delivered late due to water and sewage impasse experienced in 2012 and a majority of these properties were sold in 2016. The total number of houses sold in 2016/17 was 395 units. “Rental revenue declined by 3 percent, from P182 million in 2015/16 to the current P177 million.

The decline was mainly caused by a once off sale of a major estate in the prior year, which was generating an annual rental of P2.4 million,” reads the financial statement. Gains from the sale of investment properties were P18 million, a decline of 83 percent from P107 million in 2016, still on the back of this once off sale. Rental revenue continues to be a significant and key revenue stream for the Corporation and it is the pillar of the Corporation’s sustainability model.

Income from professional fees at P30 million increased by 10 percent when compared to prior year. Professional fees are revenues from project management done on behalf of third parties. This is the third largest revenue stream for BHC and demonstrates BHC’s ability to use its skilled workforce to deliver projects on behalf of other people.

Professional fee income has grown over the years and it is part of management’s revenue diversification strategy going into the future. On the expenditure side, employee expenses went down by 30 percent mainly as a result of restructuring expenses which were incurred in the prior year. Employee expenses also declined on the back of efficiencies brought about by the re-organisation of the Corporation. Other expenses also went down by 11 percent and this combined with savings in employee expenses largely contributed to the increase in profitability.

Meanwhile, the Corporation recently developed a six year Strategy from 2018 - 2023. The major strategic focus going forward is delivery of the new mandate which clearly encompasses the social housing aspect. In the strategy period BHC is expected to deliver an average of 1500 social housing projects and 1800 commercial housing projects per annum.

Through the Corporation’s six year Strategy some key priority areas have been identified and these are mainly; developing new partnerships with the private sector in housing delivery; responding to customer needs by building/designing for specific markets; serving the unserved markets, especially low income groups; exploring alternative technologies and optimisation of BHC’s research capabilities. These strategic priority areas will ensure focus in delivering the strategic plan and will guide Management in the implementation of the long-term Strategy.

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