NWR technically bankrupt

NAMIBIA Wildlife Resorts (NWR) ended last March with an accumulated loss of nearly N$99 million, loan debt of more than N$71 million and an overdraft exceeding N$17 million.

Although the company managed to make a net profit the last two years, it remains ‘technically bankrupt’ with liabilities in the vicinity of N$241 million, outstripping assets by about N$88 million, NWR Managing Director Tobie Aupindi said in the 2008-09 annual report, tabled in Parliament last week.The document was one of five NWR annual reports submitted to the National Assembly, the first time the parastatal has done so since 2004-2005. All the reports were approved by the NWR board of directors between April and September last year. It details the state-owned enterprise’s struggle two years prior to Aupindi’s takeover, as well as its progress since a turnaround strategy was implemented three years ago. Comparing NWR’s performance from one year to the next remains a grey area, as pointed out by KPMG Namibia, who audited the bulk reports.’We were unable to obtain sufficient appropriate audit evidence that the opening balances did not contain misstatements which may materially misstate the company’s financial performance and cash flows,’ the auditors said in their report.The 2008-09 statement shows the struggling parastatal once again paid no dividend to Government, but instead retained N$98,96 million of its earnings to stay in business. In addition, Government pumped a grant of N$27 million into NWR coffers last year to clear long outstanding debt and cover other operational expenses.In 2008, the Ministry of Environment and Tourism wrote off park fees owed by the NWR to the tune of nearly N$48 million, as part of the turnaround strategy. Also as part of the turnaround strategy, NWR has asked the Receiver of Revenue for a waiver for interest of nearly N$800 000 and N$1,5 million it owes because they fell behind on employees’ income tax deductions and the paying of value added tax (VAT) respectively.NWR has steadily been running up its bank overdraft since 2004, before starting to put the brakes on last year. In 2004, its current account was N$5 million in the red. This amount spiralled to N$12 million the next year, N$24 million in 2006 and and N$29 million in 2007. In 2008 the overdraft shot up to N$31 million.NWR has two long-term loans through the Midina Fund of Old Mutual Namibia. At the end of last March it owed nearly N$11 million on the one, which was used mainly to upgrade and expand the resort at Sesriem. The second loan, backed by a Government guarantee of N$120 million, stood at around N$61 million at the end of 2009. The money was used ‘for the sole purpose of financing the turnaround strategy’, according to the financial report.NWR had to pay about N$13 million in interest on its loans last year.Although the number of board directors stayed the same during the period under review, directors’ fees were on a roller coaster. Throughout the period, NWR had six directors, the MD and a company secretary as reflected in their financials.In 2004 and 2005, the taxpayer forked out N$180 000 and N$186 000 respectively in directors’ fees. In 2006 and 2007, the amount dropped to N$79 000 and N$81 000 respectively. However, it sky-rocketed to N$646 747 in 2008, before decreasing again to N$428 120 last year.NWR has recorded a constant increase in the revenue it earns from accommodation and the goods and fuel sold at its camps. From the N$89 million earned in 2004, the amount jumped to N$169 million last year. Unfortunately, so has operational costs. Operational expenses have fluctuated between N$72 million and the nearly N$149 million of last year.Over the five years, NWR has recovered from a net operating loss of N$27 million in 2004 to a net operating profit of N$15,1 million in 2008. The figures dipped again last year, with a net operating profit of N$9,4 million recorded.By the end of last March, the company sat with N$12 million of doubtful debts, and N$15 million owed to them as trade receivables. Of the latter, N$2,5 million is owed by other parastatals, ministries and government-related departments.Its public private partnerships (PPPs) have not contributed significantly to the NWR kitty either. Of the development partners, only a handful managed to pay anything between August 2008 and March 2009. In total, NWR earned only N$4,7 million from its PPPs.Aupindi described the past three years at NWR as ‘three whirlwind years of change’.Government is solely responsible for the fact that NWR remains ‘technically bankrupt’, as the Ministry of Environment and Tourism still has not transferred the title, rights and interest in immovable properties under the SOE’s management, Aupindi maintains. The value of these assets were estimated at around N$442 million last year.