Anghami Inc. — FY2021 Form 20-F
Reporting period: Year ended December 31, 2021, compared with FY2020. This is an annual report, not a standalone Q4 filing; the provided filing text does not give separate Q4 financial results. Financial statements are audited and prepared under IFRS as issued by the IASB. The report was signed May 13, 2022.
Business context
Anghami operates a music and digital entertainment streaming platform, primarily in the MENA region, with subscription and advertising revenue. At year-end 2021 it reported about 100 million registered users, 18.2 million active users and 1.44 million Premium subscribers. It completed its SPAC business combination on February 3, 2022; its shares began Nasdaq trading on February 4.
Key financial metrics
| Metric (USD unless stated) | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $35.50 million | $30.52 million | +16.3% |
| Subscription revenue | $25.66 million | $24.72 million | +3.8% |
| Advertising revenue | $9.84 million | $5.80 million | +69.6% |
| Gross profit / margin | $9.04 million / 25.5% | $8.17 million / 26.8% | Profit +10.7%; margin down 1.3 percentage points |
| Operating loss | $13.56 million | $2.55 million | Loss widened |
| Net loss | $18.05 million | $5.74 million | Loss widened |
| EBITDA loss (non-IFRS) | $11.90 million | $1.12 million | Loss widened; 2021 was 33.5% of revenue |
| Operating cash flow | $(13.89) million | $0.17 million | Turned negative |
| Investing cash flow | $(1.49) million | $(0.90) million | Higher outflow |
| Financing cash flow | $10.40 million | $5.29 million | Higher inflow, mainly borrowing |
| Cash and cash equivalents at year-end | $0.63 million | $5.61 million | Down substantially |
| Loans and borrowings at year-end | $18.53 million | $12.74 million | Increased |
FY2021 cost of revenue was $26.46 million, up 18.4%; content acquisition and royalty costs rose 24.9% to $15.74 million. Premium gross margin fell to 14.8% from 24.0%, while Ad-Supported gross margin rose to 53.3% from 38.4%. Total liabilities were $40.99 million and the working-capital deficit was $29.87 million at year-end. Accumulated losses were $62.02 million.
Material changes versus FY2020
- Revenue growth was led by advertising, which rebounded from the pandemic-affected prior year; subscriptions grew modestly.
- Operating and net losses increased sharply. Management attributed higher expenses to marketing, headcount and expansion, professional fees, financing costs and foreign-exchange losses.
- General and administrative expenses rose 111.7% to $11.02 million; consultancy and professional fees increased to $6.12 million, including transaction-related advisory, audit and legal costs.
- Active users were 18.19 million, slightly below 18.35 million in 2020; monthly Premium subscribers increased to 1.17 million from 0.80 million. Average Premium ARPU was $1.92 versus $1.85, while churn increased to 6.5% from 5.9%.
- Management reported $1.56 million of net foreign-exchange loss, principally linked to Lebanese-pound weakness. A $2.55 million government grant was recognized in 2021.
Outlook, risks and unusual items
- Going concern and liquidity: The auditor highlighted substantial doubt about the Group’s ability to continue as a going concern, citing recurring losses and a $29.87 million working-capital deficit. Management said operations depended on operating cash generation and access to additional funding. The statements do not include adjustments that might result if the Group cannot continue as a going concern.
- Business-combination proceeds: The company reported $43.04 million raised in the February 2022 combination but only $23.4 million actually received after transaction fees and prior advances. About 97.6% of VMAC public shares were redeemed, reducing proceeds versus plan. Cash was reported at $11.9 million as of March 31, 2022.
- Management outlook: The company expects advertising recovery, further Premium subscriber growth, and expansion through localized and original content, new geographies, and event-related revenue. It provided no clear quantified revenue, profit or cash-flow guidance in the supplied text and expects continued losses while investing in growth.
- Content commitments: Minimum-guarantee commitments were approximately $7.12 million over the following two years. Subsequent to year-end, Anghami agreed to pay Amr Diab $10 million over three years for exclusivity and new content, and Rotana $4.5 million over 18 months. The Rotana dispute was settled and content restored under a new agreement.
- Other principal risks: Dependence on major labels and complex licensing/royalty obligations; competition and uncertain monetization; currency and geopolitical exposure in MENA; privacy, cybersecurity and service continuity; and potential need for more capital. The filing identified material weaknesses in financial-reporting controls and said they had not been remediated as of filing; disclosure controls were assessed as ineffective.
Investor facts to verify
- Standalone Q4 performance, which is not provided here, and reconciliation of any quarter-specific figures to the audited FY2021 statements.
- Post-combination cash, actual net proceeds, use of proceeds, and the company’s current funding needs and runway.
- Progress in remediating control weaknesses, including Oracle ERP implementation, financial-reporting staffing and internal audit.
- Actual economics and payment timing for content minimum guarantees and the Amr Diab and Rotana agreements, including their impact on margins and liquidity.
- Whether subscriber, churn, ARPU and active-user metrics use consistent definitions and are independently validated; the filing says these metrics are unaudited.