Botswana Development Corporation (BDC) reported a sharply wider half-year loss, as rising impairments, falling loan income and higher funding costs exposed growing strain in its core lending operations.
The state-owned investor posted a group loss of P144.9 million for the six months to December 31, compared with P34 million a year earlier, while total income fell 11 percent to P207.9 million. Operating loss widened to P126.6 million from P27.6 million, signalling a marked deterioration in underlying performance.
A significant portion of the pressure came from expected credit losses, which climbed to P77.5 million from P27.5 million. BDC attributed the spike to a reassessment of credit risk on a single investment exposure under restructuring, highlighting the concentration risk within its portfolio.
At the same time, interest income from loans, a key earnings driver, more than halved to P46.8 million from P113.2 million, reflecting weaker asset performance and reduced cash generation. Finance costs rose to P103.7 million, as the corporation drew down additional funding to support investment activity, further squeezing margins.
Operating expenses increased modestly, with administrative costs rising 9 percent, partly due to ramp-up costs linked to strategic projects including Lobatse Clay Works and Milk Valley.
The balance sheet points to a business leaning more heavily on debt to fund growth. Borrowings increased following a $20 million facility drawdown, while equity declined 3 percent due to cumulative losses. Total assets rose slightly, supported by higher cash balances from undrawn funds parked in interest-bearing instruments.
BDC is now pursuing a one-year turnaround plan focused on capital raising, asset recovery and new investments, as it seeks to reposition itself into a more catalytic investment vehicle ahead of its next strategy cycle.