MTN Uganda net profit for the first three months to March rose 24% to Shs150bn driven by solid growth in its voice, data and fintech business segments.

The company’s total revenue grew 19.5% to Shs 750.5bn compared to a year ago as profit after tax increased by 24.4% to 150bn.

Service revenue grew by 19.4% to to Shs741.4 bn, underpinned by strong double-digit growth in voice (up 15.5%), data (22.4%) and fintech (23.5%) revenues.

The earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 19.6% to Shs390.4 bn, with EBITDA margin stable at 52.0% and capital expenditure (capex) increasing by 27.9% to Shs122.0 bn.

“MTN Uganda sustained a positive trajectory across all business segments amidst heightened pressure on key macroeconomic indicators,” said Sylvia Mulinge, the chief executive officer at MTN Uganda.

“In this context, we are pleased with the strong operational and strategic execution delivered in the period, which enabled us to exceed our medium-term targets of mid-teens revenue growth and margin stability.”

The country’s average year on year inflation subsided to 3.2% in the quarter (Q1 2023:9.5%), although it accelerated sequentially from the Q4 2023 average of 2.5%, driven by higher energy, fuel and utilities inflation.

The local currency depreciated by 2.7% against the US dollar in the quarter, following a relatively stable full year 2023 which registered a 1.8% depreciation.

Mulinge said the company’s robust financial result was further driven by a solid commercial performance with subscribers up by 12.0% to 19.9 million, as the company navigated the SIM- registration regulations in the market.

To accelerate core connectivity, the company invested a total of Shs122.0 bn focusing on strategic network enhancements, particularly on 4G LTE. It also increased its fiber deployment and 5G coverage as the company enriched its home broadband proposition.

The company deepened smartphone penetration by 5.9 percentage points to 40.6%, supported by its strategic device financing partnerships.

“Increased smartphone usage has enabled us to drive a digital lifestyle through appification. This quarter, on My MTN app, we launched Tesa deals, an online marketplace to support the entrepreneurial activities of our youthful base while on the MoMo app, we launched an online ticketing service offering a suite of tools designed to improve event management,” Mulinge said.

Future outlook

Going forward, Mulinge said the company’s focus remains on executing key commercial strategies to drive customer acquisition to sustain its voice revenue growth amidst unpredictable macro-economic environment.

“On the data front, we will continue with rigorous customer value management strategies to drive engagement and usage, supported by ongoing investment to drive data traffic,” he said.

“Our continued investment will also support our priority to meet our quality of service and other licence obligation requirements.”

Mulinge said the company has enhanced merchant onboarding, focusing on quality acquisitions, encouraging FMCG cashless adoption and addressing bottlenecks in the ecosystem by launching merchant loans to bridge liquidity gaps.

“We will also continue to leverage our partnership with Mastercard to broaden our service offering (especially advanced services) and scope of financial inclusion, as we enable our users to easily conduct secure and convenient transactions,” she said.

She said the company would continue to address localisation requirement to explore a further sell-down of the 7% shareholding to the public to broaden our shareholder base.

“We maintain our medium-term guidance of delivering mid-teen service revenue growth, stable EBITDA margins above 50% and maintaining capex (ex-leases) intensity at mid-teen levels as we support our growth prospects,” Mulinge said.