Airtel Kenya is struggling with hard economic times with an accumulated loss of over Ksh68.09 billion, following a Ksh2.89 billion loss in 2018.
Following the loss, the Airtel’s internal auditor Deloitte doubts the company’s ability to continue operating, terming it “a going concern”.
Airtel’s liabilities and assets gap has widened in the last two years, from Ksh2.86 billion in 2017 to Ksh8.14 billion currently, flushing it to the red line.
In 2018, the company’s operating, finance, administrative and distribution costs shot to Ksh22 billion eating up to its revenue.
The company which is awaiting a not from the government to merge with state-owned Telkom, recorded goods sales worth Ksh45 million from Ksh677.2 million in 2017.
Distribution costs increased to Ksh250.6 million from Ksh55.6 million in 2017.
“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,” stated the board.
Currently, Airtel shareholder loans amount to Ksh47.5 billion in 2018, up from Ksh43.4 billion in 2017.
As of the year under review, Airtel owed Kenya Revenue Authority at least Ksh9.4 billion.
Despite recording a shift in revenue income from Ksh16.78 billion in 2017 to Ksh20.5 billion in 2018, the telco is yet to stabilise amid tariff wars with its arch-rivals Safaricom.
The company also lost Ksh618 million to suspected fraud through Airtel Money suspected to have been orchestrated by its employees.
“In 2018, incidents of cash control frauds were identified in the Airtel Money operations in Kenya, which involved circumvention of its controls by Airtel Money employees and resulted in loss of Sh670 million,” the company said earlier on.