Trustco loses at least a billion dollars in tough financial year
The 2021 financial year was tough for Trustco, with the company recording losses after tax of N$988 million, a 190% increase from the N$343 million recorded in 2020.
The company’s financial results for the period ended 31 August 2021 which were released this week, show a decrease in revenues of 49% to N$313 million, with an increase in basic as well headline losses of N$872 million and N$766 million respectively.
Trustco posted losses in two consecutive financial years, totalling N$1.3 billion.
According to Trustco’s Managing Director, Dr Quinton van Rooyen 2021 has been one of the most challenging years for Trustco’s investee companies, specifically due to the COVID-19 pandemic, and the associated macroeconomic situation they found themselves in.
Since April 2019, Trustco’s staff complement has been reduced by 269 employees due to restructuring within the investee companies.
Van Rooyen said 2021 marks the first year that the value of the group’s investments outside Namibia is greater than the value of its investments within Namibia’s borders, due to the revaluation of its real estate portfolio, and the fluctuations in the exchange rate about our substantial mining assets.
It also marks the fifth year that Trustco had not raised any borrowings locally, with all funding coming from foreign sources.
“As a result, the group’s Namibian borrowings dropped below 6% of total borrowings, the lowest it has been since the group’s inception 29 years ago. Still, the group raised USD 20 million in foreign funds to deploy in Namibia via its student lending unit during the reporting period, despite the recession and the impact of the pandemic,” he added.
Van Rooyen said they expect to have 30 years of consecutive unmodified audit reports and for the first time, the group plans to monetise one of its major foreign investments, maintaining only a minority interest in its mining activities in Sierra Leone.
“The value of that transaction, amounting to USD 150 million, will be more than the group’s current market capitalisation,” van Rooyen added.
Trustco Board Chairman, Adv Raymond Heathcote said although Trustco continues to trade at a sizeable discount to its intrinsic value, the Board remains focused on creating wealth for stakeholders by growing its underlying investee companies and pursuing value-unlocking initiatives wherever possible.