Uganda’s largest telecom company MTN Uganda reported a gain in full-year profit on the back of a jump in data revenue and moderated growth in operating expenses.
MTN recorded a net profit of Shs387.3bn ($107.3m) in 2021 — adjusted for two one-off charges; Shs51bn in transitional licence fees and Shs11.3bn to Invesco Uganda to terminate a support services agreement — up from Shs321.6bn the previous year, the company said in results released to the Uganda Securities Exchange.
This was on revenue that rose 9.7 per cent from 2020, with earnings before interest, tax, depreciation and amortisation up 15 per cent to Shs1 trillion.
The company added 1.5m mobile phone connections, ending the year with 15.7m mobile phone subscribers. MTN also added 732,000 data subscribers, bringing the total of active data users at the end of the reporting period to 5.3 million. Fintech users were up 16.3 per cent to 9.9m.
MTN said the “key growth segments of data and mobile money” drove the gains in service revenue — up 9.4 per cent to Shs2tn, which accounted for 99 per cent of turnover. Data revenue rose 21.9 per cent in 2021 to Shs412.4bn, while fintech revenue increased to Shs525.3bn, up from Shs476.8bn the previous year.
Revenue from voice services grew by a modest 3.6 per cent to Shs1 trillion. Although voice services still account for the majority of MTN Uganda’s revenue, contributing 48.9 per cent in 2021, their share is declining and is expected to continue in that direction in the long-term in line with global trends, according to the company’s initial public offering prospectus published last year.
“In MTN’s case, annual growth in voice services revenue of 0.8 per cent – 2.5 per cent is expected in the medium-term,” the company said. It added that the decline will be offset by growth in data and digital services revenue as smartphone penetration increases and its “mobile network capability” improves following infrastructure upgrades.
Costs were up 4.5 per cent to Shs991.3bn, mainly due to the 7.2 per cent rise in costs of revenue that reversed 2020’s 2.2 per cent decline. Operating expenses increased 2.4 per cent, down from 10 per cent in 2020. MTN said it implemented cost “efficiency initiatives” that saw it save Shs42.8bn in 2021 compared to Shs11bn the previous year.
The company said its capital expenditure increased to Shs270.2bn, mostly on infrastructure upgrades “to maintain service quality and aggressively expand our footprint in line with our data performance improvement strategy”. The upgrades include constructing more 3G and 4G sites, and a “spectrum efficiency program” migrating data traffic from 3G to 4G which helped push 4G’s contribution to total data traffic to 53 per cent, an increase of 13 per cent over the year.
MTN said it will pay a dividend of Shs4.706 per share.
