The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | MTN Uganda has set aside 125.4 billion shillings for its shareholders as dividends for the first six months of this year, translating into 5.6 shillings per share. The proposed first interim dividend is contained in the company’s financial results for the first half of the year, which returned a revenue growth of 15 percent from the same period of the previous year.
This dividend is however subject to deduction of withholding taxes. The ex-dividend date will be Tuesday, 29 August 2023, meaning that an investor who buys MTN shares on or before the said date will be entitled to the interim dividend. MTN Uganda Chief Executive Officer, Sylvia Mulinge described the performance of the company over the first half as resilient considering the “uncertain and evolving local and global macroeconomic conditions.”
These mainly included the high inflation rates that averaged 8 percent compared to 4.5 percent in the previous year, impacting significantly on the consumers and business operations.
The high inflation also impacted the costs of operation. Having peaked at 10.4 percent in January, inflation has since eased to below 4 percent, which Mulinge says is encouraging for the next half, on top of improved shilling stability.
“This improvement in macroeconomic conditions should ease some of the pressure on our customers and business going forward,” she says. Voice performance remained on the growth trend, at 9.4 percent mainly due to what they call solid growth in the customer base.
Net additions (the new subscribers vis-a-vis those who left) in the half increased by 910 customers to 18.1 million as a result of “strong gains in our customer value management addressing product affordability and competitiveness,” according to Chief Finance Officer, Andrew Bugembe.
The company also boasts of notable increments in the network quality performance, product innovation, and brand appreciation, as well as a revamped regional structure which has improved engagement with our customers. The improved network performance was also attributed to the decongesting of the 2G traffic through the migration of customers to 3G.
However, the contribution of the voice segment to total revenues continued to decline posting 43 percent from 45.5 percent in the same half of 2022, as the data and fintech revenue segments grew faster. Data revenue increased by 22.1 percent as the number of active data subscribers grew by 21.4 percent to 6.9 million.
This was helped by campaigns to increase smartphone adoption, including “MTN Pay Mpola Mpola”, which boosted the MTN Kabode smartphone sales according to Bugembe. Consequently, the smartphone penetration in the period improved to 35.7 % as the number of smartphone users rose by 24.1 percent.
The company also reports a 25 percent increase in the rate at which users consume MBs per user, while there was also higher demand for data services from the enterprise business segment.
According to from the Fintech segment, which included mobile money grew by 18.6 supported by a subscriber base that jumped 11.6 percent to 10.9 million customers.
The revenue from this was also supported by the increased use of international remittances.
As more people adopt the use of MoMoPay as a payment channel, the number of merchants has grown to 267,000 which enabled a 26.3 percent increase in the transaction volumes to 1.6 billion, while the transaction value grew by 44.4 percent to 61.6 trillion Shillings.
On their expectations for the next half, MTN is confident that the operating environment will continue improving, though the risks to inflation remain hinged on global developments.
The focus will mainly be on the seamless execution of the “Ambition 2025” plans.
“We expect improved data speeds, introduction of e-sims, and 5G connectivity to address our growing customer needs. In the fintech space, we will accelerate our cashless conversion through key partnerships and aggressive mobile money ecosystem expansion.”
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