AcKainley Insider

Sechaba’s Quiet Strength and Its Uncomfortable Dependence

KBL, the dominant contributor to Sechaba, saw revenue decline from P2.99bn to P2.93bn alongside a 9 per cent decline in volumes. Under normal circumstances that would raise concern but the more telling signal was on the costs as expenses fell sharply from P2.27bn to P2.06bn.

The picture at Coca-Cola Beverages Botswana was less reassuring. Revenue declined from P1.25bn to P1.22bn but unlike KBL costs grew even as volumes declined by 7 per cent. The result was a squeeze on profitability with earnings falling by roughly 40% undoing the good the beer business has done

At the end, Sechaba still delivered. Profit after tax rose 19 per cent mainly driven by a 17 per cent increase in share of profit from associates which climbed from P338.6m to P396.2m.

Botswana Minerals Raises P21 million to fund Copper Exploration in Botswana

Botswana Minerals PLC through issuance of new shares has secured £1.15 million in funding to accelerate its copper exploration programme in north-western Botswana.

The company issued 460 million new ordinary shares at 0.25 pence to both existing and new investors, the operation also included cash participation by certain directors.

This follows discovery of Copper and Lead-Zinc though AI analysis in North-West Botswana. The analysis has helped identify several areas that could contain valuable minerals across Botswana Minerals’ large landholding in the Damaran Belt.

The analysis outlines two main types of potential deposits. The first suggests the presence of copper and other metals like silver, nickel and cobalt, likely formed by ancient underground heat and fluid activity. The second points to a 20-kilometre stretch that could contain lead and zinc deposits spread over a wide area.

RDC Properties Profit Jumps, on Paper

RDC Properties reported a 53% increase in annual profit to P236.8 million this was supported by operational cash generation and higher property valuations. However, a significant portion of the growth comes from fair value adjustments rather than recurring cash earnings.

A large portion of the reported profit increase is driven by fair value gains on investment properties which contributed over P130 million out of the total P236.8 million profit. This means more than half of headline earnings came from revaluation adjustments rather than day-to-day rental operations. While revenue growth was relatively modest at 5% to P600.9 million, and net property income increased by 8%, the scale of profit expansion is disproportionate to these operational gains.

Total cash balances rose 104% to P233.6 million which was also driven by the disposal of non-core assets exceeding P200 million. These disposals were achieved at an 8% premium to book value and the proceeds were used to reduce debt which reduced loan-to-value ratio down from 41.7% to 37.7%.

S&P Says Botswana Is a Slightly Riskier Borrower Now

S&P Global Ratings has downgraded Botswana's credit rating to BBB- from BBB. According to the Agency, the demand for natural diamonds is low, competition from fake diamonds is rising and Botswana's production has fallen roughly 40% since 2023.For a country where diamonds account for the bulk of exports and a third of government revenue, this leaves the government with limited room to respond fiscal demands.

S&P claims that Botswana will continue to run fiscal deficit near 9% of GDP through 2029, the consequences of such a performance will trigger a downgrade as they put the country in a position that undermines it's credit worthiness.