MTN Uganda has reported a 48.1% growth in profit after tax to Shs193.6bn for the first six months of 2022 amidst a tough economic environment.
Wim Vanhelleputte, the company's outgoing CEO said "MTN Uganda delivered a resilience half year 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 across the country as well as persistent global and supply chain challenges. The combination of these factors have had a significant impact on the spending power of our customers in the period under review."
Listed on the Uganda Securities Exchange last year, the company sustained investment in its business with capital expenditure of Shs201.7bn in the first half which underpinned the resilience and quality of the network serving its customers.
Vanhelleputte said, the company's investment and commercial strategy enabled it to increase its subscriber base by 8.9% to 16.3million, thus sustaining its market leadership.
The company's active data subscriber base grew by 28.1% to 5.7million enabled by improved quality of network and data services for its customers. The growth in data users and traffic was also boosted by increased 4G coverage, which reached 67.7% (up 15.4% year-on-year) population coverage as of June 30, 2022.
Fintech subscribers surge
Within the company's platforms, fintech subscribers grew by 14.1% to 9.8million as it executed on its objective to deepen financial inclusion. During the period under review, the company partnered with Jumo to offer micro loans on mobile money through its MoSente product.
Executives said, the partnership would allow for more short term borrowing options for customers in addition to its MoKash product (savings and lending) and MoMo advance products both in partnership with NCBA Bank.
Vanhelleputte added: "Our solid and commercial execution has enabled us to achieve double digit service revenue growth of 10.0% in a difficult operating environment. This is in line with our medium term target largely anchored on the strong performances of our data and mobile money revenue segments."
The company reported Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of Shs548.7bn (up 7.2% year - on - year) with a 1.3pp decline in EBITDA margin to 50.2%.
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Executives said, the decline was largely driven by increased operational costs including additional costs related to separation of the mobile money subsidiary to operate as a fully independent company in line with their ambition of 2025 strategy.
The company has already announced changes in management. Vanhelleputte, who has overseen the growth of the telecom company both in terms of subscriber numbers and revenue, will now head the West and Central African markets of Liberia, Guinea-Conakry, Guinea-Bissau, and Congo-Brazzaville within the MTN Group.
Sylvia Mulinge, who has been Safaricom's Chief Consumer Business Officer having occupied various senior roles over the years in the Kenya's telecom company, including head of retail, head of sales, and director of consumer business, will become the next chief executive officer for Uganda market.
Key facts and figures
Profit after tax increased by 48.1% to Shs193.6bn
First interim dividend declared for FY2022 is Shs5 per share (Shs111.95bn)
Mobile subscribers increased by 8.9% to 16.3million
Active data subscribers increased by 21.8% to 5.7million
Active fintech subscribers increased by 14.1% to 9.8million
Service revenue grew by 10.0% to Shs1tn
Data revenue grew by 36.8% to Shs237.6bn
Fintech revenue grew by 20.5% to Shs302.1bn
EBITDA grew by 7.2% to Shs548.7bn
Capital expenditure excluding right of use of assets increased by 30.7% to Shs201.7bn
