Botswana Housing Corporation (BHC) delivered a stronger financial performance in the 2023/24 financial year, recording a significant rise in profitability even as overall revenue declined.
According to its newly released annual report, profit before tax increased by 40% to P42 million, while profit after tax rose 26% to P29 million, reflecting improved margins and stronger contributions from rental operations and joint ventures.
The corporation’s bottom-line improvement was achieved despite a 5% fall in total revenue, which dropped from P553 million to P525 million. BHC attributed the decline primarily to lower sales of housing inventory and reduced income from external project contracts. However, rental income performed exceptionally well, increasing by 21% to P339 million on the back of newly added rental stock and a government subsidy that replaced scheduled rental increases. With 9,855 rental units across the country and a vacancy rate of just 1.87%, rental revenue has now firmly overtaken sales as BHC’s dominant and most stable income stream.
Operating expenses rose by 9% during the year to reach P379 million. This increase was driven by higher staff costs, expanded maintenance of investment properties, and rising administrative expenditure linked to utilities, information technology systems, advertising and consultancy services. Impairment expenses also climbed sharply, reflecting higher rental arrears, though BHC says new collection strategies have been introduced to address the trend.
Despite cost pressures, BHC’s financial position strengthened. Total assets grew by 3% to P2.85 billion. Investment properties, valued at P1.3 billion, now account for nearly half of the corporation’s asset base, while housing inventories increased to P529 million, positioning BHC for potentially higher sales in the upcoming financial year. The corporation also maintained a low debt-to-equity ratio, which it says provides room to raise additional funding for new housing developments.
Project delivery remained robust across both the commercial and social housing segments. During the year, BHC completed 688 houses under the Self-Help Housing Agency (SHHA) programme and delivered 56 commercial units in various parts of the country. A further 375 units were under construction in locations including Gaborone, Kazungula, Nata, Rakops and Tsabong. Looking ahead, BHC plans to start nearly 1,000 new housing units during the 2024/25 financial year, with developments anticipated in Gaborone, Francistown, Maun, Tati Siding, Pilane, Palapye and Letlhakane.
Although facilities management revenue declined slightly from P42 million to P38 million due to fewer work requests, the department remains strategically important to BHC’s diversification efforts. In recent years the corporation has provided maintenance and refurbishment services to government and third-party clients, including state residences, parliamentary facilities, magistrates courts and agricultural laboratories. The corporation is in the process of expanding its client network while restructuring internal processes to improve efficiency and turnaround time.
BHC Chairperson Moemedi Gabana said the corporation showed resilience in the face of rising construction costs, higher inflation and constrained consumer demand. He noted that while the operating environment remained challenging, Botswana’s long-term economic prospects continue to support demand for new housing and related infrastructure. Chief Executive Officer Nkaelang Matenge added that the corporation is finalising a new five-year strategic plan to run from 2025 to 2030, which will focus on transforming operational efficiency, strengthening financial sustainability, expanding the housing footprint and embedding environmental, social and governance (ESG) principles into BHC’s long-term planning.
As BHC enters the final year of its two-year transitional strategy, it says it will intensify project delivery, improve customer service and broaden its revenue base while continuing to implement government-led low-income housing initiatives nationwide. The corporation expects the combination of stronger rental earnings, a growing asset base and a pipeline of new projects to position it favourably for improved performance in the years ahead.