Left-Right: MTN Uganda Chief Finance Officer, Andrew Bugembe, CEO Sylvia Mulinge and MTN MoMo MD Richard Yego during H1 financial results announcement on August.05, 2024.
MTN Uganda has announced a significant 29.7% increase in net profit to Shs 295.7 billion for the half-year ended June 2024, driven by robust growth in voice, data, and fintech services.
The telecom company’s voice revenues rose by 15.1% to Shs 626.7 billion, while data and fintech services saw impressive increases of 28.6% and 23.5%, reaching Shs 373.3 billion and Shs 442.3 billion respectively during the same period.
Overall, MTN Uganda’s service revenue surged by 20.4% to Shs 1.5 trillion, supported by a 14.6% growth in mobile subscriber numbers, which now stands at 20.7 million.
Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 22.4% to Shs 784.7 billion. In light of this performance, the company has proposed an interim dividend payout of Shs 6.6 per share, equivalent to Shs 147.8 billion, to be paid on September 20.
“MTN Uganda’s performance in the first half of the year continued on a positive trend, supported by the overall momentum in economic growth,” said MTN Uganda CEO Sylvia Mulinge.
“The Ugandan economy grew by 6.0% for the 2023/24 financial year with macro-economic indicators trending favorably in the six-month period.”
Mulinge highlighted the company’s investment of Shs 219.1 billion to enhance the quality, capacity, and resilience of the MTN network, with a focus on 4G and 5G technologies. The 4G LTE population coverage increased to 87.8%, up 4.4 percentage points, while the 5G rollout extended to 538 strategic sites, achieving full coverage of the capital, Kampala.
“Our 2G and 3G population coverage also rose to 98.9% (+0.5pp) and 93.2% (+0.8pp) respectively as we extended connectivity across the country to ensure that all Ugandans enjoy the benefits of a modern connected life,” she said.
In the fintech space, Mulinge noted that MTN’s investment in the past six months was geared towards advancing the ecosystem with a focus on enhancing appreciation of its advanced services and expanding core services.
“During Q1, we addressed our customers’ credit requirements by establishing a comprehensive loan suite, Wesotinge, in partnership with five financial institutions to meet both short and long-term liquidity needs,” she said. The company also introduced a short-term credit facility, Merchant Xtra Stock, and increased the number of cashpoints for agent top-ups to reduce float gaps, resulting in a 25.2% year-on-year increase in transaction volumes to 2.0 billion.
Looking ahead, Chief Finance Officer, Andrew Bugembe reaffirmed the company’s medium-term guidance framework of delivering mid-teen service revenue growth, maintaining stable EBITDA margins above 50%, and keeping capital expenditure (excluding leases) intensity at mid-teen levels.
“Leveraging on our network investment, we commit to deliver reliable and affordable voice and data services to empower our loyal customer base,” he said.
“To sustain our commercial momentum in the second half, we will continue to partner, innovate, and provide solutions to meet an ever-evolving market as technology advances.”
Bugembe said investments, particularly in 5G and 4G LTE, should enhance customer experience and sustain the momentum achieved.
Richard Yego, Managing Director of MTN Mobile Money Uganda Ltd, MTN Uganda’s fintech arm, said the company would continue to focus on enhancing liquidity requirements for its merchants and agents as well as solutioning for the customers to encourage cashless transactions
He said the Bank of Uganda’s directive for mandatory verification of customers conducting mobile money transactions above Shs 1 million has not negatively impacted the fintech services.