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Ghana: MTN records revenue growth in first half of 2023

Telecommunication giant, MTN Ghana has announced its results for the half year ended 2023 at its 2023 Investor Connect event held in Accra.

Its service revenue increased by 32.3% to GH¢6.2 billion as mobile money (MoMo) revenue grew by 48.8% to GH¢1.3 billion. Data revenue increased by 41.0% to GH¢ 2.6 billion, with digital revenue decreasing by 22.1% to GH¢ 0.1 billion.

Additionally, core capex grew by 54.2% to GH¢1.5 billion, while Earning Before Interest, Tax Depreciation and Armotisation (EBITDA) also rose by 29.4% to GH¢3.5 billion. Voice revenue went up 14.4% to GH¢1.7 billion, while earnings per share was up by 27.7% to GH129 Pesewas in 2023. EBITDA margin however declined by 1.3 percentage points (pp) to 56.1%.

Commenting on the results, Selorm Adadevoh, Chief Executive Officer (CEO) of MTN Ghana, acknowledged that the company has faced several challenges navigating a tough geopolitical and social,  micro-economic and regulatory operating  environments from year 2022 and cited  COVID 19, Ukraine- Russia war, US- China relations, SIM re-registration, supply chain constraints, significant market power compliance (SMP), spectrum and licence renewals as some factors that impacted the company’s operational and growth capabilities negatively.

“We have also seen other drivers of negative growth in areas like rising inflation, higher interest rates, Forex (FX) pressures, fuel cost and rising utility cost, among other things,” he added.

The situation, according to him, has introduced a sense of uncertainty and doubt on the minds of investors on furthering investments in companies like MTN Ghana.

Challenging macroeconomic environment in H1 2023

Worryingly, he noted that although inflation levels have dropped from 54.1%  in December 2022 to about 42.5%  in June 2023, a trend he described as positive, the levels are still elevated, resulting in the company feeling the pressures on its cost of operations and putting a significant burden on the business.

With respect to forex exchange, he cited the cedi depreciation against the dollar by 28. 2% in H1 2023 as well as increase in fuel and utility cost as factors that have implications on the efficiency with which the company delivers its business.

Regulatory compliance

Following the National Communications Authority’s (NCA) directive to disconnect some 5.4 million SIMs at 31st of May 2023, he indicated that the company has succeeded in re-registering 0.4 million SIMs, leaving outstanding disconnections at 4.9 million at the end of June 2023.  “We had various directives at different points through 2022, and in May this year we barred and disconnected 5.4 million customers of which we had only gotten back about 0.4 million,” he said.

Notwithstanding, he noted that the company through its sales team is continuing to put in the right measures to ensure it brings back customers who are disconnected and guide them on how to re-register and restore their connectivity.

He added that localisation of Scancom PLC and Mobile Money Limited remains a top priority for the company.

“We embarked on localisation in 2018 when we listed on the Ghana Stock Exchange and as a result of the patronage of our shareholders, we have managed to improve our localisation significantly. Our target is to get to 30 percent so we are continuing our effort to bring in investors to get us there,” he elaborated.

With respect to the company’s commercial strategy within the context of its 2025 ambition, he noted among other things that MTN Ghana is looking at revamping its product offerings by continuing to drive innovation through the life cycle of its products while also ensuring that it is able to improve experience and approach customer excellence within its existing portfolios.

Considering inflationary pressure on its operations he noted that the company will be renegotiating lower agreements to mitigate rising inflation and energy cost, while expanding national roaming pilot to nationwide coverage in 2023, and regarding its financial resilience MTN Ghana will accelerate its operational excellence plan to further bolster its performance cost.

Mr. Adadevoh expressed the company’s willingness to adopt strategies that minimise operational inefficiencies while instituting measures that will enable it to achieve significant value with lower cost going forward. “Our goal as management and leadership of this business is to acknowledge the environment we operate in and develop the best strategies to continue to drive the operations forward”.

On its financial resilience for 2023, he said the company will accelerate its operational excellence plan to further bolster its performance.

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