MTN Uganda proposes to pay Shs123bn dividend

Kampala, Uganda | THE INDEPENDENT | MTN Uganda has proposed to pay a final dividend of Shs 123bn or Shs 5.5 per share to shareholders following double-digit growth in profits for 2022.

The annual financial results show that the Uganda Securities Exchange-listed firm recorded a 19.3% growth in profit after tax to Shs 406.1bn for the year ended December. 31, 2023 due to growth in data and fintech services.

Data and fintech revenues grew by 24% and 24.9% to Shs511.3bn and Shs 656.1bn, respectively, on account of increased users. Voice revenues, though, contributed 44.2% to total service revenue, recorded a marginal decline of 0.5% during the period under review.

The telco’s service revenue grew by 11.1% to Shs 2.26 trillion as subscribers ballooned 9.2% to 17.2 million.

MTN Uganda CEO Sylvia Mulinge said the company delivered solid results amidst a challenging macroeconomic environment characterized by slow economic growth, a weaker shilling, rising inflation and interest rate in the first three quarters of the year.

She, however, noted that improvement in the macroeconomic environment in the fourth quarter is likely to continue and positively impacting on the company’s growth trajectory.

“As we step into 2023, we are cautiously optimistic that the economy will continue improving and support our growth objectives,” she said.

Investment

Mulinge revealed that MTN accelerated investment in the core connectivity business and rolled out an additional 475 base stations, bringing the total number of sites to 3,067.

She said the telecom’s population coverage with 2G now stands at 98.1%, 3G at 91.5% and has significantly increased the 4G population coverage from 62.7% in 2021 to 79.9% to improve service delivery.

In line with the company’s own the home strategy, the company closed the year with over 83% growth in active home broadband subscribers to 97,181. Fibre network, too, expanded by 20.4% to 9,418km.

Mulinge said the increased site rollout will go a long way in sustaining their network performance and ensuring a better experience for the customers.

“Our improved data performance and revamped device financing programme has further attracted an additional 1.4 million data customers to our network, increasing our smartphone penetration this year to 35.0%,” she said.

“On the fintech front, we have continued to grow rapidly, reaching new milestones in product rollout and merchant partnerships thus further deepening digital and financial inclusion.”

Future outlook

Mulinge said the company remains focused on customer value proposition and will leverage the strong MTN brand to sustain growth over the medium term.

“We will continue to work to consolidate the recovery in our voice business through CVM initiatives and defend our position in conditions of sustained pressure on customer wallets,” she said, adding that the company will continue to invest in its network to support the ongoing growth in demand for data services.

She said the company is also looking forward to launching new fintech products to drive growth in the MoMo verticals, with a priority to further accelerate growth in advanced services revenue.

Mulinge said they are having engagements with the Uganda Communications Commission to secure more spectrum allocation in the 700/800 MHz and 2,600 MHz bands to provide customers with an even better user experience and faster throughputs on the network.

She said the company is also engaged with authorities on the reduction of taxes charged on smartphone devices to increase smartphone affordability and access in line with commitment and work to drive digital inclusion.

“On the fintech front, we continue to engage the Bank of Uganda on the mobile money tax charged on withdrawals of 0.5% to accelerate the cashless transaction proposition and also further deepen financial inclusion in the country,” Mulinge said, adding that the country is largely cash economy, presenting a massive opportunity for MTN’s payment and transaction platforms that will benefit customers and broader stakeholders.