Despite a dip in overall revenue, the Botswana Housing Corporation (BHC) has demonstrated remarkable resilience, posting impressive profitability figures driven by growth in rental income.
The corporation’s revenue declined by 5 percent, from P553 million in 2023 to P525 million in March 2024.
However, BHC’s strategic focus on rental income and high-margin investment properties paid off handsomely, leading to a significant increase in profitability.
In a challenging economic environment, BHC achieved a profit before tax of P42 million, up from P30 million in the previous financial year—a 40 percent increase.
Net profitability improved to P29 million, a 26 percent rise from the prior year’s P23 million. This growth was fueled by increased sales of high-margin investment properties, rental revenue growth, and income from joint ventures.
The revenue decline was largely due to a drop in housing inventory sales and external project contract income, resulting in an aggregate reduction of P87 million.
Nevertheless, rental revenue surged by 21 percent, rising from P280 million in the prior year to P339 million.
This increase was attributed to the addition of new rental properties and a rental subsidy from the shareholder.
“Rental revenue once again surpassed sales revenue as the major revenue stream for the corporation. The performance of rental stock is pleasing as it is key to the financial sustainability of the business. This remains within the strategic target of maintaining very low vacancy rates and maximisation of this revenue stream,” the financial report stated.
By the end of the financial year, BHC’s rental stock stood at 9,855 units rented out to individuals, government entities, and corporations, with a low vacancy rate of 1.87 percent.
Professional fees revenue, generated from project management services to third parties, improved by 54 percent year-on-year, driven by increased government spending and economic growth.
BHC delivered 688 houses under the Self-Help Housing Agency (SHHA) scheme and plans to deliver 470 additional SHHA houses in the 2024/25 financial year.
Commercially, BHC delivered 56 units, with 375 housing units at various construction stages in Gaborone, Kazungula, Nata, and Rakops, expected to be completed in the 2024/2025 financial year.
There are also plans to start constructing 967 housing units across the country during this period, in locations such as Gaborone, Francistown, Maun, Pilane, Tati Siding, Palapye, and Letlhakane.
“As of now, the corporation will intensify project delivery through the implementation of the project management office. On the diversification drive, the corporation will continue with its strategy of growing both the facilities management and professional fees to ensure continued business sustainability. We will continue to increase our footprint across the country by implementing the government’s low-income housing programme, such as the SHHA, undertaken with a focus on sustainable development as a social responsibility to maintain a habitable future Botswana,” BHC stated.
Despite a slight decrease in facilities management revenue, from P42 million to P38 million, this income stream continues to perform well, adding significant value to key customers who outsource their maintenance to BHC.
BHC’s total asset base amounts to P2.850 billion, a 3 percent increase, with the investment properties portfolio standing at P1.3 billion at the end of the financial year, representing 45 percent of the corporation’s total assets.
