Telecoms company MTN Uganda has announced a 20% growth in profit after tax for the first quarter of the financial year, reaching Shs 120.6bn ($35.2m).
CALIFORNIA, UNITED STATES | NOW THEN DIGITAL — MTN Uganda, a leading telecommunication company, has reported a 20% growth in profit after tax for the first quarter of this financial year, amounting to Shs 120.6bn.
The company, which is listed on the Uganda Securities Exchange, also recorded a profit before tax of Shs 168.7bn for the three-month period to March, representing a 17.4% increase compared to the same period last year.
MTN Uganda CEO Sylvia Mulinge expressed her satisfaction with the solid results posted in Q1, saying “We will continue to drive growth in the business going forward with an ongoing focus on EBITDA margin resilience, in line with our Ambition 2025 objectives”. She also noted that while capital expenditure decreased by 16.3% to Shs 94.5 billion ($27.6m) in the period, it is expected to increase in the medium-term to support the company’s growth prospects.
Higher service revenue and operational efficiencies drive EBITDA growth
MTN Uganda’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose 17.3% to Shs326.4bn, which the company attributes to higher service revenue and continued operational efficiencies. This was delivered through the company’s expense efficiency programme and disciplined capital allocation.
MTN Uganda’s data and fintech service revenues rose 25.7% and 20.7% to Shs 145.3bn and Shs 174.8bn, respectively, while total service revenues climbed 15.8% to Shs 621.1bn.
CEO’s Response and growth prospects
Sylvia Mulinge, CEO of MTN Uganda, expressed her satisfaction with the solid results posted this quarter and the improvements observed in the company’s operating environment.
Mulinge said the company will continue to drive growth in the business going forward, with a focus on EBITDA margin resilience, in line with the company’s Ambition 2025 objectives.
The company’s capital expenditure, excluding right of use assets, decreased by 16.3% to Shs 94.5bn, but Mulinge noted that it is expected to increase in the medium-term, owing to sustained investment to support the company’s growth prospects.
MTN Uganda has, in recent years, focused on 4G network expansion, fibre network roll-out, and infrastructure modernisation to enhance its user experience.
Investments in network infrastructure to support 5G transition
MTN Uganda’s 4G population coverage significantly increased from 65% to 80.7% during the period under review, and the company has been investing in network infrastructure to prepare for 5G and address its customers’ requirements.
MTN Uganda recently launched a partnership with Huawei Technologies to align its infrastructure towards a cloud-native 5G Capable Core network, enabling a future-oriented network with greater service agility, innovation for both consumer and industrial verticals, and improved operational efficiency.
“We are also investing in our network in preparation for 5G to address our customers’ requirements and support sustained growth. In line with our 5G transition, MTN Uganda launched a partnership with Huawei Technologies to align our infrastructure towards a cloud-native 5G Capable Core network,” Ms Mulinge said, adding, “This initiative will enable a future-oriented network with greater service agility, innovation for both consumer and industrial verticals, and improved operational efficiency.”
Focus on MoMo ecosystem and digital inclusion
Mulinge said MTN Uganda’s focus is on enriching its MoMo ecosystem and platform capabilities to drive financial and digital inclusion.
The company is scaling the adoption of payments and e-commerce in line with digitization of the economy, driving the adoption of Banktech products particularly loans and savings to support individuals and micro businesses as well as refining its Remittance strategy to increase flows from its regional and global partners.
Key performance indicators
As of the end of March, MTN Uganda had 17.8 million mobile subscribers, 10.9 million fintech subscribers, 6.7 million data subscribers, and 268,000 active MoMo pay merchants.
The company’s growth prospects are positive, driven by sustained investments in network infrastructure and a focus on financial and digital inclusion.
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