Airtel Kenya is in a financial ditch after recording a Ksh5.9 billion in 2020, raising cumulative losses to Ksh77.41 billion.
In the financial year ended March 2021, the telco’s liabilities rose to a high of Ksh43.7 billion from Ksh37.78 billion as of March 2020.
This could lead the firm to being declared insolvent.
“These conditions, along with other matters… indicate the existence of a material uncertainty which may cast significant doubt on the company’s ability to continue as a going concern,” warns Airtel’s auditors Deloitte.
In the year under review, Airtel accumulated Ksh52.2 billion as shareholder loan up from Ksh46.6 billion the previous year, which is deemed as “sufficient liquidity to manage operations”. The loans, from its holding company, Bharti Airtel Kenya BV, attract a three percent interest per annum and are payable on demand.
“The directors are of the opinion that the company is a going concern on the basis of it generating cash flows of at least the management projections and also obtain additional funding from its shareholders required to meet its obligations,” the board said.
“The directors acknowledge that the continued existence of the company as a going concern depends on the outcomes of various strategic measures that the directors continue to pursue to return the company to profitability and continued financial support from the company’s shareholders and bankers.”
The net assets in foreign currencies rose to Ksh8.89 billion in 2020 as compared to its net foreign currency liabilities which stood at Ksh56.17 billion.
In 2019, the liabilities in foreign currencies stood at Ks49.85 billion while the assets stood at KsSh6.19 billion.
In the year under review, Airtel Kenya borrowed Ksh9.23 billion, up from Ksh6.83 billion in 2019.
Some of the notable loans taken by the telco in 2020 include Ksh2.18 billion from JP Morgan Bank, Ksh1.64 billion from HSBC-Mauritius, Ksh5.4 billion from Citi Bank and Ksh1.7 billion in loan and overdrafts from Standard Chartered Bank.
The net borrowings as at March 2021 stood at Ksh61.28 billion, up from Ksh53.19 billion the previous year.
“The current borrowings from HSBC-Mauritius and Standard Chartered Bank are repayable within twelve months to December 2021,” said the telco.
Most of the losses recorded in 2020 were due to increased operating, finance, administrative and distribution costs which took Ksh24.82 billion of the telco’s revenue, as compared to Ksh21.27 billion in 2019.
Airtel Kenya recorded Ksh26.41 billion in revenues, a Ksh5.1 billion increase as compared to 2019. Voice revenues that stood at Ksh12.39 billion, up from Ksh9.98 billion in 2019 while data revenues grew to Ksh7.79 billion up from Ksh5.84 billion.
Interconnecting revenues stood at Ksh2.6 billion in 2020 up from Ksh2.1 billion in 2019 while roaming revenues dropped to Ksh116.9 million in 2020, down from Ksh281.74 million.
Revenue from the sale of accessories and handsets stood at Ksh69.37 million.