REVIEW OF OPERATIONS

NATURE OF THE BUSINESS

Trustco is a diversified triple listed majority family owned and operated business, with a culture of creating long-term sustainable growth for all stakeholders. Decisions are biased towards long-term value creation and short-term hurdles are viewed as catalysts to drive success. The company primarily invests in high quality, world class assets in the financial services and resources industries. Its head office and major investments and operations are situated in Namibia with operations in South Africa, Sierra Leone and Mauritius.

BUSINESS REVIEW AND OUTLOOK

The 18 month financial period reported on turned out to not only be a challenging period for Trustco, but also for Namibia and the world. With the world at large experiencing worsening macroeconomic conditions due to the COVID-19 pandemic, Namibia’s recessionary environment deteriorated. Trustco would not emerge unscathed from this financial reporting period.

Trustco, however, is nothing if not resilient, and implemented several measures to minimize the impact of external conditions on the group. During this reporting period, the group restructured its debt with its international funders, with interest payments, capital holidays as well as term extensions up to 7 years being negotiated. The group also negotiated a term loan facility of USD 20 million with an existing international funder to provide student financing and debt relief to students during the pandemic.

During this time, the group also changed its financial yearend to 30 September. While the above served to minimize the impact on stakeholders, it unfortunately did not nullify it. The group recorded revenues of NAD 618 million, down 57% from the previous period, or 72% down if normalised to 12 months. Group earnings similarly decreased by 148% to a NAD 266 million loss, or down 132% if normalised. A significant portion of this loss (NAD 279 million) was due to property revaluations triggered by adverse market conditions, which the group expects will recover once the current crisis subsides.

The group, however, remains lowly geared, diversified, well capitalised and is positioned to take advantage of the inevitable economic upswing in the wake of the pandemic. The board remains positive about future growth, especially as the resources segment transitions to commercial production.