Botswana Telecommunications : ABRIDGED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023

Botswana Telecommunications Corporation Limited

ABRIDGED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023

The Board and Management of Botswana Telecommunications Corporation Limited ('BTC') are pleased to present to shareholders the audited annual financial results of the Company for the year ended 31 March 2023.

Revenue	EBIDTA	Profit	EPS	Cash	Dividend
	Margin	After tax	(Thebe)	Conversion	Declared
P 1.4bn	27.8%	P 108m	10.32 thebe	13%	6.71 thebe

Presentation of Financial Statements

The Annual Financial Statements are presented in Botswana Pula which is the Company's functional currency. All financial information and values are rounded to the nearest thousand (P'000) except where otherwise indicated. The financial statements of the Company for the year ended 31 March 2023 were authorised for issue by the Members of

COMMENTARY

Full year performance in numbers

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 March 2023	Mar 2023	Mar 2022
	P '000	P '000

STATEMENT OF CASH FLOWS

For the year ended 31 March 2023	Mar 2023	Mar 2022
	P '000	P '000

the Board in accordance with a resolution on 22 June 2023.

Basis of Preparation and Accounting Policies

The Annual Financial Statements have been prepared on a historical cost

• Revenue P1.4 billion
• EBITDA margin 27.8%
• Profit after tax P108 million
• Earnings per share 10.32 thebe
• Cash Conversion at 13%

REVIEW OF RESULTS

The Annual Financial Statements of the Company for the year ended 31 March 2023 were authorised for issue by the Board of Directors on 22 June 2023.

Performance Overview

The Company recorded revenue of P1.4 billion during the year under review. The Company's profitability was under pressure, reflecting a demanding operating and economic environment. Performance was primarily impacted by the once off restructuring costs and an escalation in replacement costs for stolen copper cables from our network.

Data services and mobile financial services revenue growth momentum continued though partially offset by the decline in performance of voice services. The cost of sales decreased by 2% leading to gross profit being 2% above the prior year. The total impact of copper cable theft included in the cost of sales is P56 million, substantially offsetting the savings that would have been realised in the cost of sales. The Company has since intensified rollout of alternative technologies to replace the copper network. Other income has come down mainly as amortisation of government grants for

Revenue from contracts with customers

Cost of services and goods sold

Gross profit

Interest income

Interest expense

Other income

Selling and distribution costs Administrative expenses

Impairment reversals on financial assets and contract assets Other expenses

Profit before tax

Income tax expense

Profit for the year

Other comprehensive income not to be reclassified to profit /loss in subsequent periods

Impairment on assets transferred to held for sale

Income tax effect

Other comprehensive income for the year

Total comprehensive income for the year

Basic and diluted earnings per share (Thebe):

1,400,027 1,392,257

(594,196) (604,751)

805,831 787,506

48,247 18,796

(18,632) (22,767)

5,129 39,918

(23,120) (18,242)

(439,174) (403,573)

24,3163,191

(254,088) (222,436)

148,509 182,393

(40,188) (41,608)

108,321 140,785

• (7,761)
• 1,707
• (6,054)

108,321 134,731

10.3213.41

CASH FLOWS FROM OPERATING ACTIVITIES
Operating cash flow before working capital changes	352,721	439,539
Working capital adjustments:
Increase in inventories	(1,413)	(8,197)
(Increase)/decrease in trade and other receivables, contract assets and prepayments	(29,406)	5,001
Increase in trade and other payables and contract liabilities	4,880	22,023
Cash generated from operations	326,782	458,366
Ordinary dividend paid to shareholders	(52,187)	(92,676)
Income tax paid	(1,034)	(169)
Net cash from operating activities	273,561	365,521
CASH FLOWS USED IN INVESTING ACTIVITIES:
Investment to expand operations:
Purchase of property, plant and equipment	(209,321)	(113,050)
Purchase of intangible assets	(16,221)	(20,903)
Proceeds from disposal of property, plant and equipment	2,421	387
Proceeds from assets held for sale	34,992	-
Interest income received	48,247	18,796
Net cash used in investing activities	(139,882)	(114,770)
CASH FLOWS FROM FINANCING ACTIVITIES:
Grants received	15,883	3,465
Interest paid on lease liabilities and IRU liability	(18,984)	(23,130)
Principal payment of lease liabilities	(19,105)	(17,125)
Principal payment of IRU liability	(60,022)	(55,946)
Net cash from financing activities	(82,228)	(92,736)

basis, except as modified by the revaluation of certain fixed assets and on the going concern basis.

The accounting policies adopted for the period comply in all material respects with International Financial Reporting Standards (''IFRS'') issued by the International Accounting Standards Board (''IASB''), interpretations issued by the International Financial Reporting Standards Interpretations Committee and in the manner required by the Companies Act of Botswana (CAP 42:01).

Dividend Declaration

The BTC Board has declared a final dividend of 6.71 thebe per share for the year ended 31 March 2023. In terms of the Botswana Income Tax Act (Cap 52:01) as amended, withholding tax at the rate of 10% or any other currently enacted tax rate will be deducted from the gross dividend.

Important dates pertaining to this dividend are:

Declaration date - 22 June 2023

Ex-dividend date - 02 August 2023

Last date to register - 04 August 2023

Dividend payment date - 16 August 2023

rural telephony (Nteletsa) infrastructure came to an end. The once off pay out of P55 million for the organisational restructuring drove the increase in the operating expenditure substantially. The primary objective of the organisational restructuring was the creation of a more fit-for-purpose organisation that supports the strategic repositioning of the business into the future. Additionally, the exercise ensures that the Company has the right human capital in the right jobs that will contribute towards the future viability and long-term financial sustainability of the Company.

The pressure on costs as highlighted above led to EBITDA of P390 million, a

STATEMENT OF FINANCIAL POSITION

As at 31 March 2023

ASSETS

Non-current assets

Property, plant and equipment Intangible assets

Right of use assets IRU asset

Mar 2023	Mar 2022
P '000	P '000

1,488,810 1,449,452

162,579 183,946

109,170 115,337

382,096 420,305

Increase in cash and cash equivalents	51,451	158,015
Net foreign exchange difference on cash and cash equivalents	(910)	(846)
Cash and cash equivalents at beginning of the year	520,442	363,273
Cash and cash equivalents at end of the year	570,983	520,442

STATEMENT OF CHANGES IN EQUITY

Auditor's report

The auditor, Deloitte & Touche, has issued its unmodified opinion on the Company's annual financial statements for the year ended 31 March 2023.

These are available for inspection at the registered office of Botswana Telecommunications Corporation Limited. This publication has been extracted from those financial statements. This abridged financial information and any reference to future financial performance has

decline of 15%.

Domestic Economy

Botswana real gross domestic product (GDP) is expected to grow by 4% in 2023 due to the expected positive impact of the Transitional National Development Plan and reforms aimed at improving the economy and business environment. The inflation rate decreased to an average of 9.4% in the first quarter of 2023 but remaining above the medium-term objective range of 3 - 6%. The inflation trend is projected to ease downwards within the range in the second quarter of 2024 due to monetary policy stance, recent decrease in domestic fuel prices, modest domestic demand, increase in interest rates and constrained supply of credit globally; expected decrease in global inflation and international commodity prices; as well as the projected appreciation of the Pula against the South African rand, all expected to exert downward pressure on domestic Inflation.

(Source Botswana Monetary Committee, 28 April 2023)

Outlook

BTC continues to play a leading role in the enablement of the national digital transformation drive through continuous investment in the modernisation of the network, to enable high speed internet services across the country. This is expected to increase internet penetration and utilisation which in turn will fuel data revenue growth. Over the last 2 years the scourge of copper theft in our networks has escalated and caused immense disruption to availability and quality of service to our customers. In response we have directed our investments to accelerating the de-coppering of our network and to provide service through high-speed mobile, radio and fibre networks. Fibre to the home (FTTH) has been completed in many areas of greater Gaborone, Francistown, Jwaneng and Orapa and customers are being migrated from copper to fibre networks. Our high-speed radio networks cover 100% of Gaborone, Tlokweng and some villages in the greater Gaborone and we expect to cover 80% of our customer base by 2024, and 100% by 2025. We continue with our deployment of the 4G/4.5G mobile network to drive mobile data utilisation. Our main objective is to drive high speed connectivity for our customers to experience best internet service and enable digital transformation capability.

Contract assets

Current assets

Inventories

Trade and other receivables

Contract assets

Income tax receivable

Cash and cash equivalents

Assets held for sale

Total assets

EQUITY AND LIABILITIES

Capital and reserves

Stated capital

Revaluation reserve

Accumulated profits

Non-current liabilities

Development grants

Lease liabilities

IRU liability

Contract liabilities

Deferred tax liability

Employee related provisions

Current liabilities

Trade and other payables Contract liabilities Lease liabilities

IRU liability

Current portion of development grants Current portion of employee related provisions

Total Liabilities

Total equity and liabilities

28,766-

2,171,421 2,169,040

54,832 53,419

215,605 179,580

23,130 35,081

829810

570,983 520,442

865,379 789,332

• 32,222
  865,379 821,554

3,036,800 2,990,594

478,892 478,892

334,826 361,375

1,537,542 1,441,428

2,351,260 2,281,695

23,220 8,543

112,259 115,753

74,077 120,590

5,142-

80,649 55,640

5,962 7,994

301,309 308,520

287,666 279,765

5,377 13,522

18,068 16,718

46,513 60,022

860860

25,747 29,492

384,231 400,379

685,540 708,899

3,036,800 2,990,594

For the year ended 31 March 2023

Balance at 1 April 2021

Profit for the year

Other comprehensive income for the year Total Comprehensive Income

Ordinary dividend declared

Depreciation transfer for land and buildings

Balance at 31 March 2022

Profit for the year

Other comprehensive income for the year Total Comprehensive Income

Ordinary dividend declared

Transfer to retained earnings upon disposal of residential properties

Depreciation transfer for land and buildings

Balance at 31 March 2023

	Stated	Revaluation	Accumulated
	Total
	Capital	Reserve	Profits
	P '000	P '000	P '000	P '000
	478,892	382,363	1,379,999	2,241,254
	-	-	140,785	140,785
	-	(6,054)	-	(6,054)
	-	(6,054)	140,785	134,731
	-	-	(94,290)	(94,290)
	-	(14,934)	14,934	-
	478,892	361,375	1,441,428	2,281,695
	-	-	108,321	108,321
	-	-	-	-
	-	-	108,321	108,321
	-	-	(52,920)	(52,920)
	-	(21,889)	28,063	6,174
	-	(4,660)	12,650	7,990
	478,892	334,826	1,537,542	2,351,260

however not been audited by the auditors.

By Order of The Board

Lorato Boakgomo-Ntakhwana

Chairperson

Anthony Masunga

Managing Director

Board of Directors

Lorato Boakgomo-Ntakhwana (Chairperson), Anthony Masunga (Managing Director), Maclean Letshwiti, Andrew Johnson*,Ranjith Priyalal De Silva**, Thari Pheko, Bafana Molomo, Thato Kewakae.

*South African **Sri Lankan

Company Secretary

Sidney Mganga

Company Number

BW00000748937

Transfer Secretaries

Central Securities Depository Company of Botswana

Plot 70667, Fairscape Precinct. 4th Floor, Fairgrounds, Gaborone Private Bag 00417, Gaborone

Contact Details: 3674400/ 09/11/12

Contact Person: Nonofo Phalatse or Ambrosia Khupe

Auditor

DELOITTE & TOUCHE

Plot 64518 Fairgrounds

P O Box 778

Gaborone, Botswana

Megaleng House

Plot 50350, Khama Crescent

P.O. Box 700

Gaborone, Botswana