Uganda: MTN Uganda Reports Q1 Net Profit Surge to Shs150.0 Billion

MTN Uganda, a leading telecommunications provider, has announced impressive financial results for the first quarter of 2024, ending March 31. The company's net profit rose by 24% year-over-year, reaching Shs 150 billion (approximately $40 million). This growth was driven by significant increases across its voice, data, and fintech business segments. Overall, MTN Uganda's total revenue surged by 19.5% year-over-year to Shs 750.5 billion ($200 million), with service revenue growing by 19.4% to Shs 741.4 billion ($197 million).

The strong financial performance can be attributed to a 15.5% increase in voice revenue, a 22.4% rise in data revenue, and a 23.5% surge in fintech revenue. The company's earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 19.6% year-over-year to Shs 390.4 billion ($104 million), with the EBITDA margin stable at 52.0%. Additionally, capital expenditure (capex) rose by 27.9% to Shs 122 billion ($33 million).

MTN Uganda's robust financial results reflect the effectiveness of its growth strategy and its ability to capitalize on the increasing demand for voice, data, and fintech services in the country. The company's continued investment in network infrastructure and expansion of service offerings position it well as a leading telecommunications provider in Uganda.

Sylvia Mulinge, the Chief Executive Officer at MTN Uganda, expressed satisfaction with the company's performance across all business segments despite the challenging macroeconomic environment. Uganda's average year-on-year inflation decreased to 3.2% during the quarter, down from 9.5% in Q1 2023, although it rose from the Q4 2023 average of 2.5%, driven by higher energy, fuel, and utilities inflation. The Ugandan shilling depreciated by 2.7% against the US dollar during the quarter, following a relatively stable full year in 2023 with only a 1.8% depreciation.

This depreciation can have significant implications for public debt, inflation, and the overall economy. For instance, a weaker shilling increases the cost of servicing foreign debt and raises the prices of imported goods, contributing to higher inflation. Despite these challenges, MTN Uganda's strong operational and strategic execution allowed the company to exceed its medium-term targets of mid-teens revenue growth and margin stability.

By focusing on delivering quality services and expanding its offerings in voice, data, and fintech, MTN Uganda has maintained a positive trajectory and contributed to the development of the telecommunications sector in the country. The company's strong financial results were also driven by solid commercial performance, with the subscriber base growing by 12.0% to 19.9 million. This growth was achieved while navigating SIM-registration regulations, which can pose challenges to customer acquisition and retention.

MTN Uganda invested Shs 122.0 billion in strategic network improvements, emphasizing the expansion of its 4G LTE coverage. The company also increased its fiber deployment and 5G coverage to enhance its home broadband services, providing customers with more reliable and high-speed internet access. Additionally, MTN Uganda has boosted smartphone penetration in the country by 5.9 percentage points to 40.6%, supported by strategic device financing partnerships that make smartphones more accessible and affordable.

CEO Sylvia Mulinge highlighted the company's commitment to promoting a digital lifestyle through "appification." This quarter, MTN Uganda launched Tesa deals on its My MTN app, an online marketplace supporting entrepreneurial activities among its youthful customer base. On the MoMo app, the company introduced an online ticketing service with tools to improve event management, further enhancing user experience and expanding the platform's utility.

Looking ahead, MTN Uganda will focus on implementing key commercial strategies to drive customer acquisition and sustain voice revenue growth amid an unpredictable macroeconomic environment. The company aims to maintain its competitive edge by providing high-quality voice services and attracting new customers. In the data segment, MTN Uganda plans to continue rigorous customer value management strategies to boost user engagement and data usage.

Furthermore, MTN Uganda intends to leverage its partnership with Mastercard to broaden its service offerings, particularly in advanced financial services. This collaboration will enable users to conduct secure and convenient transactions, ultimately expanding financial inclusion and facilitating seamless digital payments for customers.