MTN Uganda revenue rises to Shs1.3 trillion

Telecom company, MTN Uganda has announced quarterly financial results for the month ended June 2022, showing a 10% increase in service revenue to Shs1.3 trillion, amidst a difficult business environment.

According to the company, the growth in revenue was supported by strong growth in data and fintech subscribers that grew to 5.7 million and 9.8 million respectively.

As a result of growth in subscribers in the two segments, Fintech revenue grew by 20.5% to Shs302.1 billion while data revenue increased by 36.8%, supported by growth in active data users.

The growth in active data subscribers to 5.7 million, is attributed to the improved quality of network and data service.

“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,” MTN noted.

On the other hand, the results indicate that MTN’s mobile subscribers increased by 8.9% to 16.3 million, backed by the company’s investment, and continued execution of its commercial strategy.

Meanwhile, profit after tax increased by 48.1% to Shs193.6 billion. Due to this, MTN’s board has approved an interim dividend of Ush 5.0 per share to be paid at the end of September 2022.

“Notice is hereby given that the company’s directors have approved the payment of an interim dividend of Ush 5.0 per share (Ush 111.95 billion) for the six months ended 30 June 2022. This is subject to deduction of withholding taxes. The number of ordinary shares in issue at the date of this declaration is 22,389,044,239,” the company announced.

Voice revenue declines

Despite growth in most of the company’s segments, the results show that voice revenue declined by 4.9%.

The decline according to MTN is blamed on reduction in spend by the company’s subscribers, particularly rural client base, reflecting the macroeconomic pressures on our customer’s spending power.

“Voice revenue growth was also impacted by the substitution effect of consumers’ structurally higher demand for data services.”

Commenting on the results, MTN’s outgoing Chief Executive Officer, Wim Vanhelleputte said they managed to deliver a resilient half-year performance despite a difficult business environment characterised 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,” Vanhelleputte said.

He noted that the combination of these factors has had a significant impact on the spending power of their customers in the period under review.

He stressed that, like other companies, MTN continues to face strong headwinds related to forex, increasing inflation, financing costs, diesel/petrol prices and the impact of global supply chain disruptions.

He warned that these challenges are likely to have more pressure on both MTN’s business and customer.