Accra, Ghana, August 14, 2020//-MTN Ghana, a subsidiary of the MTN Group, a leading emerging market mobile operator has defied economic headwinds to post impressive financial results for 2019.
The year 2019 had some macro challenges following the previous year’s shutdown of some financial institutions and continued cleanup of the financial sector.
Despite the challenging environment, MTN Ghana which offers voice, data, mobile financial, and other digital services to its over 22.6 million customers across all regions, continued its growth.
Performance
The company which only two year-old on Ghana Stock Exchange (GSE) recorded a strong profit after tax growth of 33.6% year-on-year (YoY) to GH¢1.01 billion as at December 2019.
The increased profitability performance according to its 2019 annual report was anchored on strong service revenue growth coupled with successful execution of its cost efficient strategies.
Its service revenue grew by 22.8% YoY, was driven by excellent growth in revenues from Voice, Data and Mobile Money popularly known in Ghana as (MoMo).
Similarly, the company’s voice revenue went up in the double-digits and increased by 19.4% YoY to GH¢2.31 billion and contributed 44.9% of service revenue.
During the period under review, data revenue growth was strong at 32.5% YoY to GH¢1.46 billion and contributed 28.4% of service revenue.
MoMo revenue continued to grow strongly, increasing by 28.0% YoY to GH¢0.96 billion and contributed 18.6% of service revenue, according to the report.
The growth was attributable to an increase in the number of active subscribers (+8.9%), increased transactional activity of person-to-person (P2P) transactions as well as good growth in more advanced services –such as retail merchant payments and international remittances.
Importantly, the company’s operating costs dropped by 3.0% on the back of various cost efficient initiatives which impacted positively on its cost base and efficiency levels in 2019.
The improvement led to a reported EBITDA growth of 65.7% YoY, with a YoY EBITDA margin expansion of 13.1 percentage points to 50.8%.
The company’s BRIGHT growth drivers remain data, digital (including Rich Media Services and MoMo), enterprise business and wholesale business.
Capitalisation and dividend
At the close of 2019, Scancom PLC (MTN Ghana) had a market capitalisation of GH¢8.6 billion making it the third largest listed company on the Ghana Stock Exchange.
The company was the most traded stock on the Ghana Stock Exchange accounting for about 52.7% of stock market turnover.
To this end, the MTN Ghana Board is recommending a final dividend of 4 pesewas on ordinary shares bringing the total dividend for the year 2019 to 6 pesewas per share or 73.1% of profit after tax and a 20.0% YoY increase in dividend per share.
Overall, its performance generated a return on equity of 36.0% to its shareholders, representing a YoY improvement of 4.7 percentage points.
Investments in network and MoMo
“Our vision is to lead the delivery of a bold new digital world to our customers and our mission is to make our customers’ lives a whole lot brighter.
We are at the forefront of technological and digital change. In 2019, we invested GH¢1,112 million in our network”, the Board Chairman of MTN Ghana, Ishmael Yamson, said.
The Chief Executive Officer of MTN Ghana, Seporm Adadevoh noted: “The business executed well on its capex plans in the year, supporting significant improvement in coverage expansion and maintenance of the network, customer experience and quality of service (QoS). During the year, we rolled out 280 2G, 557 3G, 900 4G and 100 rural telephony sites”.
MTN Ghana is also investing $2.5 million in artificial intelligence (AI) to beef up its MoMo platform to enable it win the fight against mobile money fraud in the country.
The General Manager of MobileMoney Limited of MTN Ghana, Eli Hini revealed this at the MTN Ghana’s maiden virtual Annual General Meeting (AGM) in Accra on 13th August 2020.
The company has helped the police to arrest over 40 mobile money fraudsters so far and retrieved some money from them in some of the cases, based on intelligence provided by staff, he noted.
Mr Hini acknowledged that the more MoMo subscribers grow, the more the fraudsters also get sophisticated, but his outfit improving their systems and processes daily to stamp out the canker.
He said: “We have built systems that are able to pick intelligence which led to police swoops in specific communities where the fraudsters were arrested and some money retrieved for customers”.
Whereas MTN invests heavily in AI to fight MoMo fraud, it also behooves on customers to be on high alert and not expose themselves to fraudsters.
Mr Hini reminded customers: “Never discuss your mobile money transactions with anyone who calls and says they are calling from MTN – never give out your MoMo PIN to anyone who claims he is from MTN – if you are not participating in any promotion, ignore any one who calls you and claims you have won a reward”
Currently some 15.5 million Ghanaians have mobile money wallets and a total of GH¢4 billion has been transacted on the MTN Mobile Money platform since its inception, according to him.
This is good for the Ghanaian economy because the money remains in the financial sector and are being invested in the country.
Innovation and customer focus
Drawing more light, Mr Adadevoh said to maintain its relevance and to keep up with the dynamism of the telecommunications industry, the company would continue to innovate, create and build meaningful relationships that would improve customer experience and brighten lives.
“Our focus on the customer is paramount and drives continuous innovation. Our various customer value management (CVM) initiatives and pro-consumer activities coupled with improved network augmented subscriber growth”.
Giving back to the community through MTN Ghana Foundation
One of MTN’s focused areas is sustainability, which the business considers a great responsibility and drives to contribute to the socio-economic development of the country in which we operate.
“In line with this, MTN Ghana continued to invest in our communities, with the MTN Ghana Foundation support reaching a total of 149 projects at a cost of GH¢41 million, since inception in 2007.
In 2019, the Foundation initiated eight new projects in education, three in health and one in economic empowerment”, he said.
Impact of COVID-19
MTN Ghana acknowledges the outbreak of COVID-19 pandemic and its potential impact on its supply chain.
While it monitors unfolding developments, it is exploring multiple scenarios in a bid to mitigate the impact of the pandemic on its business.
Other opportunities within the digital space
The telecoms services provider is upbeat about its compelling investment case as it continues to maintain a strong position in the Ghanaian market with strong revenue growth and leadership in core service delivery.
As the second largest West African economy with a strong GDP growth and improved macro environment, MTN Ghana continues to see several opportunities in digital and the financial services space, that it is confident will lead to further acceleration of growth.
This is augmented by an exciting youth opportunity in data, MoMo and digital adoption. Supported by a strong brand presence and positive reputation, the telecoms giant will keep soaring.
By Masahudu Ankiilu Kunateh, African Eye Report
