23 Nov 2017

BotswanaPost has recorded a significant growth in revenue for the financial year 2017/18.

This is an improvement from last year’s results, which saw BotswanaPost recording high financial losses and demanding high number of subsidies from government after registering a loss of P27.7 million.

The financial statements issued at a breakfast meeting at Avani Hotel recently showed that BotswanaPost increased its revenue by 6.8 per cent from P428.7 million to P457.8 million.

The company recorded a 7.9 per cent reduction in administration and operating costs, representing P125.5 million while pre-tax costs reduced from P25 million to P12.9 million representing 51.9 per cent reduction.

The balance sheet position also improved by almost 10 per cent, with total assets revolution of P538.6 million.

However, liquidation is still under pressure but the Post is heavily geared to reduce that burden.

BotswanaPost chief executive officer, Mr Cornelius Ramatlhakwane attributed this to a number of initiatives, in particular, the introduction of the operational efficiency and performance improvement scan because the state owned postal service was operating at a loss.

The scan was meant to check whether the Post Company was “fit” to serve and “fit” for growth.

“When I became CEO in October 2015, I told the board that I wanted to find out why we are making losses. We decided to check if the company is indeed “fit to serve” and “fit for growth” by doing the Operational

Efficiency and Performance Improvement Scan, which is like a health check for companies.

The main aim was to answer three questions; can we increase our revenues; can we be more efficient; can we be profitable,” he added.

Mr Ramatlhakwane explained that after conducting the Operational Efficiency and Performance Improvement Scan towards the end of 2015, BotswanaPost decided to extend its icon of Excellence strategy by one year to end March 31, 2017.

He said at that time, the company was at a dramatic turning point with the top line growing, and the bottom line deteriorating, which meant that it could either improve or decline as a business.

“That is why the scan was so important in establishing exactly where our inefficiencies and costs are lying. The scan was key to addressing issues relating to productivity, efficiency and costs, and then, ultimately, profitability.

Following the scan, he said BotswanaPost introduced a customer-centric value-centred model to provide operational efficiency that would see the company turn around in the next two years.

The company now has five functional areas: governance; operations and technology; commercial; finance and administration; and human capital and skills development.

The chief executive officer further explained that the strategy started with a 12 month execution plan, which is currently being implemented adding that during the first year, the company had to implement solutions to the problems discovered through the scan and then, in the second year, the company must begin to see the results of these improvements.

He explained that through the scan, they discovered that the top-heavy company structure did not support the business and customers’ needs saying the head office (18 percent of the workforce) was consuming 44 per cent of the payroll, while the norm in the financial services industry was that head offices consume 20 per cent to 30 per cent of the payroll.

Also, revenue per labour cost was a key indicator of performance in a company with 44 per cent of labour costs, consumed by 18 per cent of the people, which meant that there was no efficiency in the workplace.

For his part, BotswanaPost chairperson, Mr Polokoetsile Motau explained that though there was sufficient improvements in many areas of business there were many challenges that included difficult economic conditions, general decline in traditional mail volumes to sales revenue, threat of technology to the business as well as social mandate, which strained the business. ENDS