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MTN Uganda posts net profit of Shs 100bn in Q1

The firm maintains a positive outlook going forward

Kampala, Uganda | THE INDEPENDENT | Telecom firm, MTN Uganda recorded a 20% increase in profit after tax to Shs100bn in quarter one of 2022, signifying an improvement in profit margins.

The performance was boosted by data revenue, which increased by 45% underpinned by a 20% growth in active data users, improvement in broadband coverage, smart phone penetration and data traffic.

Wim Vanhelleputte, the CEO MTN Uganda said: “We made good progress in the first quarter of 2022 amidst a challenging macroeconomic environment following a protracted lockdown due to COVID-19. Trading conditions have further been affected by rising household inflation and fuel prices fuelled by the war in Ukraine, which have had a notable impact on consumer purchasing power.”

He added, “the full reopening of the economy has resulted in some uptick in demand and although this has not been as pronounced as expected, an open economy should help ease some of the pressures that have been felt.”

The firm maintained its market leadership in the country and registered solid growth in its overall subscriber base of 8.5% to 15.9million.

The firm recorded a double-digit service revenue growth of 11.0% driven by strong growth in mobile data and mobile money segments.

Profitability was underpinned by solid execution of its expense efficiency programme which enabled Earnings Before Interest, Taxes, Depreciation, and Amortization growth of 11.8% and a 0.4pp improvement in the (EBIDATA) margin to 51.6%.

Its service revenue grew by 11.0% driven by strong growth in data and fintech revenue segments. Fintech revenue grew by 20.7% supported by a larger base of mobile active subscribers. There was sustained growth investment in the network with capital expenditure totalling to Shs114.1bn in Q1. The firm also deployed 115 new sites and increased 4G coverage to 16% during the period under review.

Voice revenue declined by 4.7% as a result of the current macro-economic disruptions based on early trends especially in the company’s mass market segment.

The firm continued to drive digital inclusion and affordability by reducing the price of lower-tier internet bundle packages.

MTN Uganda is majority owned by South Africa’s MTN Group and is listed on the Uganda Securities Exchange (USE). The firm listed on the USE in December after a deeply undersubscribed initial public offering.

In 2021, the firm reported a 6.6% jump in pre-tax profit compared with the previous period, supported by higher data sales and faster uptake of its fintech services. Until today, it faces severe competition from Airtel.

Going forward, Vanhelleputte said, the future preference will be determined by developments in the economy locally and forces from the global markets linked to the Russia-Ukraine war.

The company will invest in more 4G sites across the country especially in densely populated areas and city suburbs to increase service delivery and consolidate its market leadership.

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One comment

  1. Good progress

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