Uganda’s National Social Security Fund (NSSF), MTN Uganda’s second-largest shareholder has welcomed the just-released 2021 MTN Uganda results as impressive and said that the declared dividend is timely.
In an online interview with CEO East Africa Magazine, Richard Byarugaba, the Managing Director of NSSF said: “Impressive subscriber growth (mobile subscribers – 10.7% to 15.7M), and double-digit growth in key segments (data and mobile money) coupled with operational efficiencies contributed towards a 14% growth in operating earnings. The dividend declared and due for approval and payment is a plus for investors given the challenging times.”
With 8.84% shares, NSSF is MTN Uganda’s second-largest shareholder, after MTN International (Mauritius) which own 83.05%.
Charles Mbire, the MTN Board Chairman is the third-largest shareholder with 3.99%. Other investors own a combined 4.12%.
On 7th March 2022, MTN Uganda announced that despite a tough operating environment,
total revenue had grown by 10% from UGX1.878 trillion in 2020 to UGX2.060 trillion in 2021. This was driven by a 9.4% growth in service revenue- from UGX1.866 trillion in 2020 to UGX2.040 trillion in 2021.
Service revenue constituted 99% of the overall revenue of the business.
Service revenue itself was driven by a 3.6% growth in voice revenue, from UGX971 billion to UGX1.007 trillion; a 21.9% growth in data revenue from UGX338 billion to UGX412 billion and a 10.2% growth in fintech revenue, from UGX477 billion to UGX525 billion.
Data and fintech, the fastest risers, combined formed 45.9% of the company’s revenue.
Revenue growth was backed by a 10.7% growth in voice subscribers, from 14.2 million to 15.7 million as well as a 16% growth in active data users from 4.6 million to 5.3 million from 4.6 million.
Mobile money users also grew by 16.3% from 8.5 million to 9.9 million. The mobile money agent network also grew by 47.8% to 173,400 and so did the mobile money merchants- by 61% to 52,926.
Revenue growth, combined with what the company said were efficiencies and cost management initiatives, MTN Uganda, reported it had made UGX340.4 billion in net profit- a growth of 5.8% from the UGX322 billion in made in 2020.
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Stephen Kaboyo, the Founder and Managing Director of Alpha Capital Partners, an indigenous Ugandan firm focusing on sovereign asset management, foreign exchange trading strategies and financial markets advisory, also believes that MTN’s performance is commendable.
“MTN Uganda has posted solid financial performance driven by data and fintech revenue which registered double-digit growth. All other core units remained on the growth path with subscriber base growing at the same time,” he told this reporter on email, adding: “It is important to note that the impressive performance was achieved in a very challenging economic environment undermined by the Covid pandemic.”
Kaboyo also said that MTN was able to post a good EBITDA margin an indicator of an efficient company.
“An EBITDA margin of 51.3% is considered a decent comparative benchmark in evaluating the operational efficiency and it also indicates that the operating expenses were much lower in relation to its total revenue,” he said.
Andrew Muhimbise a renowned retail investor at the stock market in an online interview with CEO East Africa Magazine, said, “in general the performance was good, delivering a profit of UGX340bn vs UGX320bn projection.”
“MTN is paying 335.6 billion in dividends, out of a profit of UGX340.4 billion. This comes to UGX14.99 dividend per share and UGX15.2 earnings per share. The total dividend for the year 2021 is 98.5% above the 60% stated dividend policy which is prudent especially at a time when the MTN share price has been on a downward price spiral,” Muhimbise told CEO East Africa Magazine.
“I applaud MTN for declaring all Q4 earnings as a dividend,” he said.
He however believes MTN can do better especially as the economy opens up.
MTN said it would pay a combined UGX 335.6 billion, in dividend which translates to a total dividend per share of UGX 14.99.
