MTN Uganda registers an increase in subscribers and revenues.

 

Finacial results for the next six months ended 30 June 2022

By

 Roger Bambino

-

 August 5, 2022

MTN Uganda has delivered a resilient- half-year performance amidst- a difficult- macroeconomic environment-, characterized by increased inflationary and currency pressures. This has largely been influenced by higher fuel prices, rising domestic food crop prices due to dry weather conditions across the country, as well as persistent global production and supply chain challenges. The combination of these factors has had a significant impact on the spending power of our customers in fhe period under review.

Despite the hardships, MTN Uganda has been able to sustain investment in their business with CAPEX of UGX 201.7 billion in HI, which underpinned the resilience and qualify of the network serving their cusfomers. During this period, the telecom giant was recognized as the Best Performing Data & Voice Network in Uganda, having attained the highest Network Performance Score for the past two consecutive years.

MTN Uganda was also recognized as the Most Admired Brand in Uganda by Brand Africa 100 for the second year in a row. Brand Africa believes that developing successful brands in Africa will create jobs, fund Africa’s development, and position Africa as an entrepreneurial, independent, and competitive continent.

The company has registered an increase in subscriber base by 8.9% to 16.3 million, maintaining its market- leadership. The active data subscriber base grew by 21.8% to 5.7 million enabled by the improved quality of network and data service for its customers. The growth in our data users and traffic was also boosted by increased 4G coverage, which reached 67.7% (up 15.4pp, YoY) population coverage as of 30 June 2022.

However, voice revenue declined by 4.9% as a result of reduced spend by our subscribers, who are mainly using data services and leveraging OTT services for voice calls this is the substitution effect of consumers’ structurally higher demand for data services.

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MTN Uganda grew fintech subscribers by 14.1% to 9.8 million. In line with the company’s strategic priority to also accelerate advanced services in fintech. The company has partnered with Jumo to offer microloans on mobile money through our MoSente product. MoSente is a convenient service that enables MTN customers to access credit facilities. The partnership will allow for more short-term borrowing options for customers in addition to their MoKash product (savings and lending) and MoMo Advance products (overdraft facility), both in partnership with NCBA bank.

The telecom firm has achieved double-digit service revenue growth of 10.0% in a difficult-operating environment. This is in line with their medium-term target, largely anchored on the strong performances of our data and mobile money revenue segments. In a statement, outgoing CEO Wim Vanhelleputte said;

We reported EBITDA of UGX 548.7 billion (up 7.2% YoY) wihh a 1.3pp decline in EBITDA margin to 50.2%. The margin decline was largely driven by increased operational costs, including additional costs related to the separation of the mobile money subsidiary to operate as a fully independent company in line wihh our Ambition 2025 strategy.
MTN Uganda’s commitment to achieving net zero emissions by 2040 underpins our environmental Social and Governance (ESG) principles premised on the belief that the company’s growth and success should not come at the expense of the planet. In this regard, we have partnered with Ubuntu Towers Uganda and the American Tower Company (ATC) to connect all our network sites to the hydroelectricity grid. This year, we plan on connecting a total of 250 sites.

Summary of the Salient feature 

• Mobile subscribers increased by 8.9% to 16.3 million 
• Active data subscribers grew by 21.8% to 5.7 million 
• Active fintech subscribers increased by 14.1% to 9.8 million 
• Service revenue grew by 10.0% to UGX 1,087.3 billion 
• Data revenue grew by 36.8% to UGX 237.6 billion 
• Fintech revenue grew by 20.5% to UGX 302.1 billion
• Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 7.2% to UGX 548.7 billion
• EBITDA margin down by 1.3 percentage points (pp) to 50.2%
• Capital expenditure excluding the right of use assets for the period increased by 30.7% to UGX 201.7 billion
• Profit After Tax (PAT) increased by 48.1% to Ush 193.6 billion
• 1st interim dividend declared for the financial year 2022 is UGX 5.0 per share (UGX 111.95 billion)