Airtel Kenya saw its net liability widen to Ksh 43.7 billion in the full year to March 2021, up from Ksh 37.78 billion as of March 2020, attributed to its insolvent position.
In 2020, Airtel Kenya’s losses doubled to Ksh 5.9 billion despite its auditors efforts to raise the red flag on the company’s financial health after the telco’s cumulative losses rose to Ksh 77.41 billion.
“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.
The telecommunication posted its highest loss in history in the financial year ended March 31, 2021, having halved the loss to Ksh 2.78 billion in 2019, up from Ksh 5.8 billion in 2017, however, losses accumulated over the years amidst an increasing debt load pushing the company into a precarious financial position.
Airtel Kenya’s borrowings in the 2020 financial year jumped to Ksh9.23 billion, up from Ksh6.83 billion in 2019. Its net assets in foreign currencies rose to Ksh 8.89 billion in 2020, up from Ksh 6.19 billion the previous year, while its net foreign currency liabilities stood at Ksh 56.17 billion up from Ksh 49.85 billion in 2019.
The telecommunication company attributed the performance to the increased loans as it picked up Ksh2.18 billion in new loans from JP Morgan Bank, in addition to the loans with HSBC-Mauritius amounting to Ksh 1.64 billion, Citi Bank Ksh 5.4 billion and Ksh 1.7 billion in loan and overdrafts from Standard Chartered Bank.
Cumulatively, the net borrowings in Airtel Kenya as at March 2021 stood at Ksh 61.28 billion, up from Ksh 53.19 billion the previous year.
“The current borrowings from HSBC-Mauritius and Standard Chartered Bank are repayable within twelve months to December 2021,” it said, indicating that it retired them by the end of last year
Its 2020 revenues rose by more than Ksh5.1 billion to Ksh 26.41 billion driven by voice revenues that stood at Ksh 12.39 billion, up from Ksh 9.98 billion in 2019. Its data revenues also grew in 2020 to Ksh 7.79 billion, up from Ksh 5.84 billion. Its interconnecting revenues rose to Ksh 2.6 billion in 2020 up from Ksh 2.1 billion in 2019. Its roaming revenues recorded the biggest dip to Ksh 116.9 million in 2020, up from Ksh 281.74 million.
Revenue from the sale of goods (accessories and handsets) in Airtel Kenya increased to Ksh 69.37 million, but way below the Ksh 677.2 million in 2017, pointing to either a struggling Airtel shops business model, or the firm’s shift away from that business line.
The country’s second largest telco also saw a rise in its employee expense benefits to Ksh 1.73 billion, up from Ksh 1.42 billion in 2019 driven by an increase of Ksh 101 million in salaries and Ksh 270 million in other related staff costs.
However, despite the challanges faced by the company the board of directors expressed their hope in the company saying
“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,” states the board in a note accompanying the financial statements.
Read also; Airtel Africa Receives $159M From First Closing of Tower Sale Transaction in Tanzania.
