Shares of Botswana Telecommunications Corporation (BTC) climbed to a seven-year high on the Botswana Stock Exchange (BSE) this week, buoyed by strong financial performance and growing investor confidence in the company’s turnaround and diversification strategy.
The rally follows the release of BTC’s half-year financial results for the period ended 30 September 2024, which showed a sharp improvement in profitability driven by cost efficiencies and the expansion of mobile financial services.
Retail-Heavy Counter Shows Renewed Momentum
BTC remains the BSE’s most retail-heavy stock, with more than 40,000 individual shareholders, a structure rooted in its landmark 2016 Initial Public Offer (IPO). While the wide retail ownership has historically increased volatility, amplified by impulse trading behaviour and citizen-only shareholding restrictions, it has also made BTC one of the most closely watched counters on the exchange.
After trading below its P1.00 listing price from December 2019 through January 2024, BTC’s share price hit a low of 60 thebe in November 2020, reflecting prolonged pressure on earnings and limited growth catalysts. The recent rebound marks a significant shift in market sentiment.
Profits Jump 57% on Cost Discipline and New Revenue Streams
According to a statement released on the BSE, BTC reported a 57% increase in Profit After Tax, rising from P71 million to P112 million for the half-year period. The performance was underpinned by a 20% reduction in costs, achieved through operational efficiencies, and modest revenue growth.
“The company reported a strong performance for the half year, highlighted by an increase of 8.5% in EBITDA and a remarkable 57% rise in Profit After Tax,” the board said.
While overall revenues grew by a modest 1%, management noted that gains in data, cloud, and financial services offset declines in traditional voice services.
Mobile Money and Data Drive Growth
BTC acknowledged continued declines in fixed network and mobile voice revenues, reflecting structural shifts in consumer behaviour. However, growth in mobile prepaid data, data centre cloud services, and mobile financial services helped stabilise topline performance.
A key contributor has been the strengthening of BTC’s mobile money platform, Smega, which the company is positioning as a driver of financial inclusion.
“The mobile financial services (Smega) ecosystem is being strengthened with the onboarding of new services and an expansion into rural areas to support the unbanked population,” executives said.
By April 2024, Smega had captured 11% market share in Botswana’s mobile money industry, a market valued at more than P30 billion. BTC said the expansion is supported by public education initiatives aimed at improving access to affordable financial services across underserved communities.
Azhizhi market analysts note that BTC’s improved cost structure and growing exposure to digital and financial services could provide a more sustainable earnings base going forward. The recent share price performance suggests renewed investor confidence, particularly among retail shareholders, as the company continues to reposition itself beyond legacy telecoms services.
