Botswana Post registers profit despite amalgamation costs
Botswana Post CEO, Cornelius Ramatlhakwane says the amalgamation of Botswana Post and Botswana Couriers and Logistics went according to plan.
Although he described the task as demanding due to government’s insistence that no jobs be lost during the process, Ramatlhakwane revealed it has been achieved despite the costs incurred.
Addressing the media recently, the CEO said the amalgamation of the two institutions presented an opportunity to maximize talent management by putting the correct people with the required skills in the right place.
The process, according to Ramatlhakwane, was a costly one as Botswana Couriers and Logistics was insolvent, with approximately P12.4 million operating losses and P30 million in unrecoverable debts.
Despite the costs incurred from the amalgamation, Botswana Post managed to register profit before tax of P6.2 million, a 51.5 percent increase from the previous year while revenue grew by 16.5 percent.
Revenue growth is reported to have been driven mainly by the courier and logistics business, which contributed 83 percent of the total revenue.
Besides incurring costs due to the amalgamation, Botswana Post experienced a 23.6 percent increase in costs of sales.
This was because of the 50 percent increase in employee costs as a result of the rise in staff complement emanating from the amalgamation process.
Meanwhile, providing an overview for the 2018/2019 financial period in the company’s annual report, Chief Financial Officer, Ofentse Mabote noted growth before inclusion of courier and logistics business was just 2.3 percent.
He said the sluggish growth was largely driven by non-traditional revenue lines which grew by 10 percent whereas traditional lines registered 7 percent growth with both lines said to be facing stiff competition.
The company is banking on PosoMoney and low cost money transfer products to protect its market positioning.
Meanwhile, Mabote says the Universal Postal Union (UPU) Postal Economic Outlook for 2019 anticipates all key factors that underpin the activities of the postal sector worldwide will continue to expand.
Therefore, he says in this environment, postal operators are trying to adapt their business models, shifting their focus to parcels, logistical and financial services.
He noted the amalgamation of Botswana Post and Botswana Couriers and Logistics comes at an ideal time as it positions Botswana Post to capitalize on this trend.