MTN Uganda records Shs1.98tn in revenue

What the company plans for years to come

Kampala, Uganda | JULIUS BUSINGE | MTN Uganda recorded 9.5% surge in revenue to Shs1.98 trillion in 2020 amidst the effects of COVID-19, citing a sharp growth in customer subscribers.

The company’s subscriber numbers increased by 12.3% to 14.2 million, up from 12.6million in the previous year.

Active data users increased by 34.8% to 4.6 million as COVID-19 drove subscribers to embrace online services such as learn-from-home and work- from- home.

The firm’s revenues from voice services grew by 3.9%, data (up 27.8%) and fin-tech (up 11.8%).

Its performance was underpinned by the increase in the user base and usage, helped by customer value management initiatives.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) margin expanded by 2.4percentage points to 49.5%, on higher revenue and effective implementation of cost efficiencies.

In pursuit of their financial inclusion objectives and growth strategy, mobile money (MoMo) users grew by 14.4% year-on-year to 8.5million, spurred by the move towards cashless financial transactions to avert the spread of COVID-19 pandemic.

However, the growth in fin-tech revenue was moderated by reductions in transaction fees to support customers, lockdown restrictions on agents and a slowdown in economic activity.

Nevertheless, company executives said the demand builds a solid base for future growth in their fin-tech business.

“MTN Uganda is committed to enhancing the wellbeing of our customers especially in the midst of global challenges. We will continue to invest in better connectivity, a seamless customer experience and better pricing structure to enable us to continue delivering a bold, new digital world for our customers,”  said Wim Vanhelleputte, the CEO at MTN Uganda.

Listing in offing

Vanhelleputte further explained that with the planned listing of MTN Uganda on the Uganda Securities Exchange, the telecom company looks forward to enabling Ugandans to own part of the MTN’s success story, and that this will further accelerate performance going forward.

He said MTN Uganda will continue to invest heavily over the next five years in infrastructure development and advanced technologies to give the customer a better experience and help the company further enhance its leadership position in the market.

Meanwhile, at group level, MTN continued to prioritise health and safety of its people and mourned the loss of 10 MTN employees to COVID-19, after reporting a total of 1,404 infections in the period to the end of February 2021.

“We are pleased to have made a US$25 million donation in support of the African Union’s programme to secure much-needed COVID-19 vaccines,” MTN Group CEO Ralph Mupita said.

He said MTN Group remains cognizant of the opportunities presented by the pandemic, particularly the accelerated need for digitalisation evidenced in the greater adoption and usage of MTN services.

During the year, 19 million data users and almost 12 million MoMo users joined the MTN family, to reach totals of over 114 million and 46 million respectively.

The group’s network remained well invested, with capital expenditure of Shs7.1 trillion in 2020 and headroom to accommodate growth of more than 110% in data traffic in the year.

Ambition 2025

MTN Group also announced a revised strategy.

“Further to our previous announcement regarding our intention to focus on our pan-Africa strategy, we completed a comprehensive strategy review in Q4 2020 and are excited to introduce ‘Ambition 2025’,” Mupita said.

“As part of this strategic repositioning, we are looking to structurally separate our infrastructure assets and platforms, such as fin-tech, to reveal value and attract third-party capital and partnerships into these businesses, over the medium-term,” he said.

Going forward, Mupita said, ambition 2025 will position the business to capture the exciting opportunities across their markets.

To support this ambition, the group plans to invest approx. Shs7.2 trillion in the network, fin-tech and digital services platforms in 2021.

The group added 29 million subscribers in the year, to reach a total of 280million across 21 markets.

It reported a 52% increase in adjusted headline earnings per share, a four-percentage point increase in return on equity to 17% and more than doubled the operating cash flow to Shs7trillion

“We continued to perform favourably against our medium-term targets,” said Mupita.

He said service revenue grew 11.9% to Shs42.4 trillion and EBITDA increased by 13.4% maintaining a strong operating leverage.

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