Africa-Press – Botswana. Botswana Oil Limited (BOL) has reported a loss of P17.2 million during the 2021/22 financial year. The State Owned Enterprise’s financial statement for the year ended 31 March 2022 shows that the company closed the financial year with an overall P17 million loss against the budgeted P14.7 million due to the low volumes recorded for the period. The state owned Oil Company says it transacted 64 million litres worth of oil products against a budget of 112million litres.
Board Chairman Martin Makgathe said that contributors to the low volumes included travel restrictions during the first half of the financial year to September 2021, which negatively impacted the demand for petroleum products. He said the reduction in volumes resulted in BOL recording P570million in revenue a 5 percent reduction to the P598million revenue recorded in the previous year.
“The challenges associated with the COVID-19 pandemic perpetuated into the year under review.”, said Makgathe adding that, “we commit to the Shareholder and the public that we are focused on improving the financial performance of the Company through cost reduction where appropriate, maximising on the benefits that will accrue to the Company from the increased import mandate and working with citizen companies to deliver on our mandate for the benefit of the citizens, who are the ultimate shareholders of the Company.”
The report also shows that BOL recorded P570 million as revenue, a decrease of 5 percent to the revenue of P598 million recorded in 2021, which was mainly a result of sales volumes that were 43 percent below the 2021 volumes.
“The average price for 2022 was P8.93 per litre compared to the average price of P5.30 per litre in 2021. The 2021 price was affected by the global demand for oil which was low due to lockdown all over the world,” said BOL’s chief executive officer Meshack Tshekedi.
He said the gross margin for the year was recorded at P25 million which was 41% below the budgeted gross margin of P43million. The major contributor to low gross margin was the lower volumes for the year.
“The gross margin thebe per litre was recorded at 39.6 thebe per litre compared to the budgeted gross margin of 38.6 thebe per litre giving a positive variance due to better prices offered from alternative routes, which was also an improvement from the 34.5 thebe per litre recorded in 2021,” he said.
The operating expenditure for the year, Tshekedi said, was recorded at P69 million, a reduction of 4% from the expenditure recorded in 2021 of P72 million. “The reduction in expenses was due to prudent management of costs to mitigate the impact of covid-19 on the volumes and revenue,” he said.
According to the annual report, the Company continued to operate on a willing buyer willing seller model as it awaited the promulgation of enabling legal instruments to operationalise the import licence it was awarded by BERA (Botswana Regulatory Authority) during the year.
“This adversely affected performance which remained low through the reporting period. By the close of the period, sales performance stood at fifty-eight (58%) against budgeted volumes of 110million litres at actual volumes of 63.8million litres,” the company said. This, BOL said, translated to 42 percent below budgeted actual sales volume performance for the year.
The highest sales volume recorded for the year was 9.1 million litres in November 2021, the company said adding that this was due to increased demand for Diesel 50PPM by the mines. The report says the company has identified a of measures available to improve its business continuity and these include the following: Cost saving measures, which can be implemented to reduce variable costs and increase efficiency; to continue investing up to 80 percent of cash in hand so as to maximise interest earned and to continue the use of alternative routes like Namibia and Mozambique to source fuel in case of disruptions in South Africa.
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