Accra, Ghana//-MTN Ghana has posted another impressive financial result despite the ravaging COVID-19 pandemic in the country.
The telecoms company recorded an amount of GH¢1.4 billion as profit after tax for year 2020, representing a 38.4% increase year-on-year (YoY).
To this end, the MTN Ghana Board chaired by Ishmael Yamsom recommended a final dividend of 5 pesewas per share.
This brings the total dividend for the 2020 year to 8 pesewas per share which represents 70.5% of profit after tax and a 33.3% increase in dividend per share over 2019.
Drivers of the growth
“Service revenue expanded by 16.4% year-on-year (YoY), driven by growth in voice, data and Mobile Money (MoMo). Growth in voice revenue (up 8.1% YoY) was supported by a 23.4% increase in our subscriber base from enhancements to our network as well as various customer value management initiatives, which helped manage churn and improve usage”, the Chief Executive Officer of MTN Ghana, Selorm Adadevoh told shareholders at the company’s Annual General Meeting (AGM) today.
The third AGM since its listing on the Ghana Stock Exchange (GSE) on 5 September 2018 was held virtually due to the COVID-19 pandemic.
He added: “The contribution to service revenue from voice declined from 45.0% to 41.8% in the year in favour of new areas of growth such as data and MoMo, in line with our strategy to diversify revenue and become a digital operator by the end of 2023”.
A strong increase in data revenue (up 21.3% YoY) benefitted from an increase in active data subscribers# (+32.4%), growth in number of smartphones on the network (+32.5%) and a general increase in usage (+105.0% to 525,372 Terabytes of data).
The higher usage was partly due to shifts in consumer behaviour brought about by the COVID-19 impact and increased capacity from an enhanced network infrastructure. Data revenue contribution to service revenue increased from 28.4% to 29.6% YoY, according to him.
“Mobile Money revenue grew by 32.2% YoY as the number of active users increased by 16.3%. This was the result of various promotions in the year, increased person-to-person (P2P) transactional activity and the offer of more advanced services such as retail merchant payments and international remittances”.
In line with company’s revenue diversification strategy, Mobile Money revenue contribution to service revenue rose from 18.6% to 21.2% YoY.
It however recorded a 6.2% YoY decline in digital revenue as a result of applying a groupwide Principal vs Agent (IFRS 15) accounting standard in 2020.
Mr Adadevoh explained: “Normalizing for this, digital revenue would have recorded a growth of 34.6% YoY. During the period, we made some enhancements in our video and gaming offerings resulting in a 328% surge in the number of active subscribers and increased adoption of our myMTN and ayoba messaging apps”.
But “digital revenue contribution to service revenue declined from 3.9% to 3.1% YoY. Our reported earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 20.8%, with a corresponding margin expansion of 1.9 percentage points (pp) to 52.7%”.
Indeed, its network improvements coupled with the increased adoption of data and digital helped to accelerate growth in the company’s customer base.
The CEO noted: “Subscribers increased by 23.4% YoY to 24.4 million, with active data subscribers increasing by 32.4% YoY to 10.8 million and active Mobile Money users increased by 16.3% YoY to 10.6 million.
We continued to manage our costs efficiently and benefitted from opex cuts arising from COVID-19 impact and digital distribution efficiencies. This resulted in healthy expansion of our EBITDA and EBITDA margin”.
Continuous investments in the network
We continued to deploy our smart capex strategy, supporting significant improvement in coverage expansion and maintenance of the network, customer experience and quality of service (QoS), in a year of accelerated need for digitalization, Mr Adadevoh said.
“As part of this, we rolled out 200 2G, 200 3G and 950 4G sites, which helped relieve the pressure on our infrastructure and significantly enhance our network resilience and service delivery across the nation.
Our smart capex deployment helped support a 105% growth in data traffic and reached 1,875 total 4G / 4G+ sites nationwide, as we continue our mission to have 4G on every site in the coming years”.
Continuous innovation and customer focus
In line with the company’s vision to lead the delivery of a bold, new digital world to its customers, it continues to innovate, create, and build meaningful relationships to improve customer experience.
The year 2020 was themed, ‘Year of the customer: the digital experience’ and this was its focus in its pro-customer activities and acquisition drive.
MTN Ghana’s 25th Anniversary
“The year 2021 marks a significant milestone in the journey of MTN Ghana’s contribution to providing vital telecommunication and digital services in Ghana. As part of our 25th anniversary, we are committing the equivalent of $25 million (or GH¢150 million) to a fund supporting Ghana’s post[1]COVID-19 recovery efforts”, the Board Chairman of MTN Ghana, Ishmael Yamson, said.
He assured: “MTN Ghana will also work to deepen its strategic partnership with the Government of Ghana through investments in digital ecosystem projects as part of the government’s long[1]term transformation agenda.
We are excited about this development and grateful to our customers and stakeholders for their support. More details will be shared as discussions and agreements progress with government and our partners”.
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