Botswana Development Corporation (BDC) returned to profitability in the financial year ended June 2026, reporting a P20.5 million profit after tax compared with a P167.7 million loss a year earlier, as higher income and lower credit charges helped reverse a difficult 2025 performance.
The turnaround came despite continued pressure on Botswana’s economy, including weaker demand in the diamond sector, higher inflation and cautious lending conditions. BDC said the recovery was driven by an increase in company income, tighter cost control and a significant reduction in credit and valuation charges.
BDC’s total company income increased 11% to P485.4 million, from P436.8 million in FY2025. The biggest contributor was dividend income, which rose to P239.0 million from P77.8 million, partly reflecting proceeds realised through the Corporation’s asset recycling programme.
The improvement in income came as interest earned on loans fell sharply to P142.2 million from P263.5 million. BDC attributed the decline to its decision to stop accruing interest on non-performing loans, saying this was intended to ensure that reported income reflected amounts it reasonably expected to collect. Recoveries will instead be recognised when realised.
Costs also moved in the right direction at company level. Operating expenses fell 4% to P147.3 million, compared with P154.2 million in the previous year. At the same time, expected credit losses dropped to P44.7 million from P118.8 million, a reduction of about 62%.
BDC nevertheless recorded a P63.1 million fair-value loss on a debt instrument, compared with a P123.3 million loss in FY2025. The Corporation said the charge related to its debt exposure to an investee company in the coal mining sector, whose operating and financial position had deteriorated.
The company’s profit before tax consequently improved to P14.4 million, from a P171.3 million loss in FY2025. After tax, BDC reported a P20.5 million profit.
The turnaround was accompanied by a substantial increase in capital deployment. BDC said it disbursed P855 million during FY2026, nearly 20 times the previous year’s level, with 62% going to established, cash-generative counterparties. Its investment assets increased to P3.17 billion, from P2.91 billion a year earlier.
The Corporation also released P614 million through its asset recycling programme, while P388 million of Group assets were classified as held for sale. The programme is aimed at releasing capital from underperforming and non-core exposures for debt servicing and reinvestment.
The stronger balance sheet was reflected in BDC’s cash position. Company cash moved from an overdraft of P21.9 million to P162.4 million, while Group cash increased from P77 million to P345.3 million. Company equity rose 3% to P2.29 billion, while Group equity attributable to shareholders remained broadly unchanged at P3.0 billion.
However, the improvement at the parent company level did not translate into a profitable Group result.
The BDC Group recorded a P78 million loss after tax, compared with a P15.7 million profit in FY2025. The Group’s loss before tax was P22.3 million, against a P26.1 million profit in the prior year. BDC attributed the weaker Group performance largely to reduced conferencing activity and subsidiaries that are still scaling up their operations.
Group income fell to P552.3 million from P787.4 million, while operating expenses increased 7% to P322.3 million as subsidiaries incurred higher operating and start-up costs while moving towards optimal capacity. The Group did, however, record a 19% increase in trade income to P97.4 million, led by its automotive business.
BDC expects the Group’s performance to improve as its subsidiaries mature. Milk Valley Farm, one of its major investments, is expected to begin commercial milk production in FY2027 as most of its more than 600 Girolando dairy cows imported from Brazil begin calving. The project is intended to eventually support forward integration into dairy processing.
Looking ahead, BDC enters FY2027 with an investment pipeline valued at P1.63 billion, spanning manufacturing, hospitality, energy and climate, agriculture, healthcare, financial services and technology. It also plans to deploy a further P1.39 billion over the following two years.
The Corporation said it has also secured approval for a new facility from the Arab Bank for Economic Development in Africa (BADEA), with drawdown expected by December 2026. The facility is intended to support the P1.63 billion pipeline and enable co-investment with development partners.
BDC’s new five-year corporate strategy targets P5.5 billion in investment and 25,000 jobs created and sustained by 2031. The strategy includes a continued asset recycling programme, with 30% of capital allocated towards building national champions and the remainder directed towards commercially returning investments.