Turnstar Holdings, owners of Game City Mall, have cautioned its shareholders to expect a drop in profits for the year ended 31 January 2021.
In a recent trading statement issued to shareholders, the group, which also has properties in Tanzania and Dubai, blames its fall in fortunes on the two Covid-19 enforced lockdowns implemented by government last year.
The first lockdown lasted for a period of six weeks, running from the beginning of April until mid-May. The second was implemented over the first two weeks of August but was confined to the greater Gaborone area.
The group told shareholders there were similar disruptions in both Tanzania and Dubai as well.
Turnstar explained it thus took a strategic decision to grant substantial rental concessions to commercial customers unable to operate during the first lockdown.
As such, the Group’s rentals revenues reduced to just over P257 million, down from P269.3 million collected the previous year.
In addition, the group says the developments at Mlimani City, the group’s Tanzanian complex, are financed through a US$ loan.
“These funds are passed on from Turnstar to Mlimani in the form of intercompany loans. A part of this loan was converted to share capital in Mlimani, at the commencement of the period under review,” the Group explained.
Due to the US Dollar appreciating against the local currency during the period under review, the group experienced a net foreign exchange (forex) loss on the loan of P2.6 million during the year.
These combined circumstances mean Turnstar forecast profit before tax for the year to be at least 13 percent lower than the P94 million registered in the period ended 31 January 2020. Shareholders shouldn’t be too disheartened, however, as that still works out as over P81 million in profit before tax!