Airtel Malawi Plc declares K32.5 billion dividend representing K2.95 per share

From left: Indradip Mazumdar (Airtel Malawi finance director); Kayisi Sadala (Board director); Alex Chitsime (Board chairman); Hlupekire Chalamba (Airtel Malawi company secretary & legal director); Charles Kamoto (managing director and Vilengo Beza (partner, Deloitte)

* The declared dividend is slightly way above the company’s profit after-tax of K32.3 billion

* An increase from K22.1 billion after-tax profit registered in 2020

* Between financial years 2020 and 2021, the company also grew its customer base by 24%

* To 6.25 million active customers, representing a customer net addition of 1.2 million in the year

By Duncan Mlanjira

At its 23rd annual general meeting (AGM) held on Thursday, Airtel Malawi Plc has approved a final dividend of K32.5 billion to be shared among its shareholders, representing K2.95 per share, in respect to the company’s 2021 profits for the year ended December 31, 2021.

The AGM was held virtually but hosted at the Bingu International Conventional Center (BICC), and the declared dividend is slightly way above the company’s profit after-tax of K32.3 billion, an increase from K22.1 billion after-tax profit registered in 2020.

“The final dividend of K2.95 per share also represents an increase of 40 percent against a dividend of K2.10 for the 2020 financials,” according to the financial results made available to shareholders during the AGM.

Currently, ownership of Airtel Malawi Plc — which got listed on Malawi Stock Exchange (MSE) in February, 2019 — comprises Bharti Airtel (80%), Old Mutual (8.6%), and the public (11.4%).

Between financial years 2020 and 2021, the company also grew its customer base by 24% to 6.25 million active customers, representing a customer net addition of 1.2 million in the year.

During the year, the company also saw its revenue surging by 19.5% to K131.8 billion from K110 billion in 2020, also an increase from K92.8 billion in 2019.

During the meeting, which was chaired by the company’s chairman Alex Chitsime, one of the shareholders questioned why the company has distributed more dividend that the reported profit after tax for the second consecutive financial year.

The shareholder wondered how Airtel Malawi board can maintain the company’s operating capacity and ability to finance future capex requirements without compromising its ability to pay future dividends.

In his response, one of the company’s board of directors Kayisi Sadala said dividend is paid out of Retained Earnings of the company.

According to Sadala, the company had Retained Earnings of K32.93 billion and Cash & Cash equivalent of K38.52 billion as well as free cash flow of K47.23 billion for the year after considering capex and cash tax.

“Given the health of the Balance Sheet, as mentioned above, Board of Directors have proposed a dividend of K32.4 billion without compromising the company’s operating capacity and ability to finance future capex requirements,” Sadala said.

Airtel Malawi Managing Director Charles Kamoto said they were excited that the company’s growing network footprint continues to contribute significantly to job creation agenda for the nation “and brings smiles to many families.”

“Airtel Malawi continues to be influenced by economic, regulatory and industry trends that are not always under our control. In addition, unreliable national power supply remains a challenge for all Malawians.

“Challenges in our operating environment inform and shape our strategy as we adapt to these trends and navigate our way forward,” Kamoto said.

Soon after listing on the MSE, Kamoto had said the development should be celebrated as a form of transforming the country’s economy since now it is owned by the public.

By close of business on February 24, 2019, the company’s shares had gone up by 44% from the K12.69 that was offered through the Initial Public Offer (IPO) to K17.99 per share.

He applauded the new shareholders who took the bold step to invest in the company despite many negative responses from the general public through social media that advocated against the idea of buying shares in Airtel.

He had added that the public had given their faith in Airtel and he pledged to “endeavour to continue doing good business as we have always done throughout the years — that is to provide the best services.

“As a business, Airtel Malawi plc has a clear ambition that guides and drives us on a daily basis — to win customers for life through delivering an exceptional experience that is convenient, affordable and enables the lifestyle evolution,” he had said.

“This means that our network infrastructure has to be able to connect people to one another and to the outside world and it has to enable businesses, education and entertainment.”

Airtel Malawi has invested significantly in its network as all its sites aren 100% 4G with Kamoto saying “this investment will continue as we cannot afford to be complacent”.

In his remarks, Chitsime had said the Airtel brand is a household name and that since its inception in 1999 it has been ingrained in the fiber of Malawi’s economy and contributing significantly to the GDP by employing over 20,000 people directory or indirectly.

“We have firmly aligned ourselves to the aspirations of Malawi’s local communities and our operational capabilities has supported the Government’s efforts to develop the ICT sector,” he said.

During the virtual AGM, Deloitte Chartered Accounts Partner, Vilengo Beza described the 2021 financial results for Airtel as a “true and fair view” of Airtel Malawi PLC and that they were in accordance with International Financial Reporting Standards as well as the requirements of the Company’s Act.

The AGM also re-appointed Deloitte, a certified public accountant’s body, as Airtel Malawi auditors for the ensuing year.