Botswana Telecommunications : BTC Financial Announcement

Botswana Telecommunications Corporation (BTC) announces its results for the financial year ended 31 March 2017. BTC's strategy for the first year post listing, was to ensure the return of value to shareholders by delivering on its financial commitments as outlined in the Initial Public Offering (IPO) Prospectus.

FINANCIAL HIGHLIGHTS

The results for the year ended 31 March 2017 show a significant improvement in the performance of the Corporation:

• Revenue growth of 8% year on year to P1.638bn

• Costs decreased by 26% to P1.401bn from P1.883bn in the prior year.

• Profit for the year of P237m compared to prior year loss of P371m.

• Return on Capital Employed stands at 12%

• Strong cash flows with cash and cash equivalents of P517m

• No impairment adjustment required

8%26%164%19%32%

Revenue Growth

Decline in Costs

Profit Growth

Asset Growth

Cash Increase

Revenue

P '000

2017 1,638,097

2016 1,512,291

Total Costs

P '000

2017 1,400,748

2016 1,883,110

Profit/(Loss) forthe year

P '000

2017 237,349

2016 (370,820)

Total Assets

P '000

2017 2,319,871

2016 1,949,019

Cash and Cash Equivalents

P '000

2017 516,549

2016 390,029

STRATEGIC DIRECTION FUTURE OUTLOOK

The BTC's strategy of transformation and growth is underpinned by a drive The Telecommunications landscape continues to evolve, with further to create a sustainable business and shareholder value, focusing on business liberalisation of the market. BTC remains very optimistic about its future growth, customer experience, operational efficiency, innovation and engendering prospects, as it continues to leverage on its unique product offering and wide a culture of high performance. network coverage to consolidate its position to become a market leader in

communication services.

The Company will continue to make significant investments in its network and people, in order to provide quality, reliable and affordable services to its customers, while creating value for its shareholders.

STATEMENT OF FINANCIAL POSITION	2017	2016
ASSETS	Pula '000	Pula '000
Non-current assets	1,208,312	985,520
Property, plant and equipment
Intangible Asset	71,176	43,251
Deferred Tax Assets	87,947	123,738
1,367,435	1,152,509
Current assets	77,459	92,352
Inventories
Trade and other receivables	278,428	218,129
Related party prepayment	80,000	96,000
Cash and cash equivalents	516,549	390,029
952,436	796,510
TOTAL ASSETS	2,319,871	1,949,019
EQUITY AND LIABILITIES	478,892	228,892
Capital and Reserves
Stated Capital
Revaluation Reserve	322,720	337,147
Accumulated Profits	1,147,547	986,071
1,949,159	1,552,110
Non - Current Liabilities	109,077	143,586
Development Grants
Employee related provisions	21,245	37,256
130,322	180,842
Current Liabilities	191,430	173,290
Trade and other payables
Current portion of development grants	29,453	24,397
Employee related provisions	19,507	18,380
240,390	216,067
TOTAL EQUITY AND LIABILITIES	2,319,871	1,949,019

PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements are presented in Botswana Pula (BWP) which is the company's functional currency.

BASIS OF PREPARATION

The financial statements have been prepared on a historical cost basis, except as modified by the measurement of certain financial instruments at fair value and the revaluation of certain assets, and on a going concern basis.

STATEMENT OF COMPREHENSIVE INCOME	2017	2016
Sale of goods and services	Pula '000	Pula '000
	1,615,022	1,485,839
Interest income	23,075	26,451
Revenue	1,638,097	1,512,291
Cost of services and goods sold	(675,573)	(721,632)
Gross Profit	962,524	790,659
Other income	35,547	29,425
Selling and Distribution costs	(48,728)	(42,188)
Administrative expenses	(402,311)	(406,400)
Impairement of Property Plant and Equipment	-	(522,404)
Other Expenses	(272,489)	(317,038)
Profit / (loss) before tax	274,543	(467,947)
Income tax credit/(expense)	(37,194)	97,127
(Profit / (Loss)for the year	237,349	(370,820)
Total comprehensive income / (loss) for the year	237,349	(370,820)
Basic and diluted earnings/(loss) per share (thebe):	22.60	(46.35)

FINANCIAL RESULTS REVENUE

Total Revenues for financial year March 2017

increased by 8% year on year, compared to an almost flat performance of 0.4% in the previous financial year March 2016. The increase was anchored by an across the board increase in Fixed, Data, and Mobile revenues as follows:

• Fixed Telephony Revenues increased by 4%. Fixed voice continues to provide a solid revenue base for the company contributing 32% to total revenues.

• Data Services Revenues increased by 21%, with contribution to total revenues increasing from 26% to 29%.

• Mobile Revenues increased by 5% and contributed 37% to total revenues.

COSTS

Total costs declined by 26% year on year. No impairment adjustment was recognised for the year following an impairment assessment exercise carried out at year end, compared to the P522m impairment recognised in the previous year. Further, cost of sales declined by 6%.

CASHFLOW

Cash balances increased by 32% from P390m to P516m. Cash balances were boosted by the capital raised during listing of P250m. Additionally, Cash Generated from Operations increased by 32% from P254m to P335m.

Dividends paid during the year amounted to P90m comprising a March 2016 dividend of P52m which was paid in August 2016, and a September 2016 interim dividend of P38m which was paid in February 2017.

Purchase of PPE (capital expenditure) increased by 57% on the back of capital commitments to strategic projects, namely; Mobile 3G/4G Expansion, Billing Platforms Convergence, Data Centre and Network Operation Centre (NOC).

Board of Directors

Lorato Boakgomo-Ntakhwana (Board Chairperson)

Anthony Masunga (Managing Director)

Maclean Letshwiti Gerald Nthebolan Serty Leburu

Alan Boshwaen Choice Pitso

Prof. Rejoice Tsheko

Company Secretary

Kaelo B. Radira

Company Registration Number

CO2012/12936

Registered Office

Megaleng Khama Crescent Plot 50350

P O Box 700

Gaborone, Botswana

Auditors Ernst & Young P O Box 41015

Gaborone, Botswana

Bankers

African Banking Corporation Botswana Limited

Barclays Bank Botswana Limited

First National Bank Botswana Limited

Stanbic Bank Botswana limited

Standard Chartered Bank Botswana Limited

Bank Gaborone

FINANCIAL POSITION

Total assets increased by 19% from prior year P1.9bn to current year at P2.3bn. Property, Plant and Equipment grew by 23% owing to the roll out of Mobile Network Expansion (3G and LTE), Billing platforms convergence and other strategic programmes.

DIVIDEND DECLARATION

The BTC Board of Directors has declared a final dividend of 11.09 thebe per share, payable to all shareholders registered in the books of the Company at close of business on Friday 14 July 2017. The dividend will be paid net of applicable withholding taxes under the Botswana Income Tax Act, on or about Friday 25 August 2017.

By order of the Board

Lorato Boakgomo-Ntakhwana Anthony Masunga

STATEMENT OF CASHFLOWS	2017	2016
CASH FLOWS FROM OPERATING ACTIVITIES	Pula '000	Pula '000
Operating profit before working capital changes	369,765	262,450
Working capital adjustments:	14,893	1,575
Decrease in inventories
(Increase)/decrease in trade and other receivables and prepayments	(44,299)	47,258
Decrease in trade and other payables	(6,127)	(57,103)
Cash generated from operations	334,232	254,180
Ordinary dividend paid to shareholders	(89,765)	-
Net income tax refunded	23,260	2,722
Net cash from operating activities	267,727	256,902
CASH FLOWS USED IN INVESTING ACTIVITIES	(351,270)	(223,573)
Investment to expand operations:
Purchase of property, plant and equipment
Purchase of intangible assets	(47,699)	(30,997)
Proceeds from disposal of property, plant and equipment	7,026	4,121
Interest income	23,075	26,451
Net cash used in investing activities	(368,868)	(223,998)
CASH FLOWS FROM FINANCING ACTIVITIES	250,000	-
Share issue
250,000	-
Increase in cash and cash equivalents	148,859	32,904
Net foreign exchange difference on cash and cash equivalents	(22,339)	(8,852)
Net Cash and Cash equivalent at beginning of the year	390,029	365,977
Cash and Cash equivalent at the end of the year	516,549	390,029

Board Chairperson Managing Director

STATEMENT OF CHANGES IN EQUITY	Stated Share Capital	Revaluation Reserve	Accumulated Profits	Total
Balance at 1 April 2015	Pula '000	Pula '000	Pula '000	Pula '000
	228,892	351,574	1,342,464	1,922,930
Loss for the year/total comprehensive income	-	-	(370,820)	(370,820)
Depreciation transfer for land and buildings	-	(14,427)	14,427	-
Balance at 31 March 2016	228,892	337,147	986,071	1,552,110
Profit for the year/total comprehensive income	-	-	237,349	237,349
Issued shares during the year	250,000	-	(90,300)	250,000
Ordinary dividend declared	-			(90,300)
Depreciation transfer for land and buildings	-	(14,427)	14,427	-
Balance at 31 March 2017	478,892	322,720	1,147,547	1,949,159