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The company executives say focus on digitization will drive growth of business going forward
Kampala, Uganda | JULIUS BUSINGE | MTN Uganda has reported a 9.1% increase in net profit to Shs442.6billion for the first six months of 2020.
According to company’s latest interim results, the performance was driven by a strong performance of mobile money, data and digital income.
Overall, the company’s revenues grew by 7.6% to Shs900billion in the period while data incomes jumped from Sh128billion to Shs167billion representing a 30% growth.
Voice revenues grew from Shs458billion to Shs471billion as the company reported a 10% growth in subscriber base to 13.2 million, up from 13 million last year.
Meanwhile, mobile money revenue, which has been another cash cow for the firm grew by 6.5% to Shs214billion as its active mobile money subscribers hit 7.4 million. Prior to this reporting period, the company’s active mobile money clients were 7.3 million.
In terms of data, the number of active users went up to 3.2 million from 3.1 million in the period under review as more individuals gained access to internet enabled devices to browse the internet for different reasons.
Costs up 6%
The firm also reported a rise in operating costs by 6% to Shs456billion during the same period under review.
This record performance comes a few months since the telecom company’s executives reached an agreement with the government to extend its operating licence to June 2032 for a consideration of US$100 (Shs370billion) million.
The licence fee, according to the group’s CEO, Rob Shuter, has been settled. However, the company still has an obligation to list some of its stake on the Uganda Securities Exchange for the benefit of the local population and minimise on profit repatriation to cushion the shilling depreciation.
Meanwhile, Shuter said the COVID-19 pandemic and instability in global oil prices has brought about extraordinary macroeconomic uncertainty and major volatility in financial markets. This, he said, has impacted the firm’s ability to continue with further realisations in the short term.
“We remain committed to execute on the asset realisation programme over the medium term and have made significant progress in laying the groundwork for when conditions become more conducive,” he said.
Shuter said COVID-19 resulted in the implementation of moderate to strict restrictions in most of the group’s markets, with the month of April having had severe restrictions.
He said the operational performance of their portfolio in the first half of 2020 has demonstrated the resilience and agility of the MTN business model, as well as its operations’ ability to sustain growth in challenging circumstances as their products and services are seen to be fundamental to the people and economies.
“This lies at the heart of MTN’s digital operator strategy,” he said.
Going forward
Shuter said, going ahead, they expect the remainder of the year to be shaped by the ongoing challenges presented by the pandemic.
“We believe that MTN will remain comparatively resilient in the current environment and is well-placed to sustain its growth over the medium term,” he said.
“As we weather the prevailing storm, focusing on managing the risks brought about by COVID-19, through strict cost-control measures and enhanced oversight of expenditure, we are also alive to the opportunities the pandemic has presented, particularly the accelerated need for digitization,” he added.
He said the company is well-positioned to further unlock the digital opportunity over time, on the foundation of the group’s strong position in high-growth markets where the populations are youthful and fast-growing.
“The opportunity to increase the adoption and usage of our data, digital and fintech services over the medium to long term remains substantial,” Shuter said.
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