MTN Ghana has assured shareholders that it has put in place the right governance structures that will sustain its profitability and long-term viability as it pays it shareholder 6 pesewas in dividends per share.
Acknowledging the increasing savviness of the telecommunication market, changing customer expectations and the heightened complexities of regulatory environment, the company stressed that it has the right strategies moving forward to continue delivering the strong growth witnessed in 2019.
MTN in 2019 delivered a strong profit after tax growth of 33.6 percent year-on-year (YoY) to GH¢1.01billion. The increased profitability performance was anchored on strong service revenue growth coupled with successful execution of its cost-efficient strategies.
The company grew service revenue by 22.8 percent YoY, driven by excellent growth in revenues from Voice, Data and MoMo. Voice revenue was up in the double-digits and increased by 19.4 percent YoY to GH¢2.31billion and contributed 44.9 percent of service revenue. Data revenue growth was strong at 32.5 percent YoY to GH¢1.46billion and contributed 28.4 percent of service revenue. MoMo revenue continued to grow strongly, increasing by 28.0 percent YoY to GH¢0.96billion and contributed 18.6 percent of service revenue.
But some shareholders, though optimistic, are wondering how the company can keep up with this growth given the outbreak of COVID-19, coupled with some regulation entanglements. The company has however noted that bright growth-drivers for the future remain data, digital – including rich Media Services and Mobile Money (MoMo) – enterprise business and wholesale business.
It assured shareholders that it will continue to drive down operational cost while efficiently investing in capital expenditure and optimizing network performance to the delight of existing customers, and to attract new ones.
“To maintain our relevance and keep up with the dynamism of the telecommunications industry, we will continue to innovate, create and build meaningful relationships that will improve customer experience and brighten lives. Our focus on the customers is paramount and drives continuous innovation,” noted Selorm Adadevoh, CEO of MTN.
“2019 marked the ‘Year of the customer’ for MTN Ghana, and in 2020 we are building on that foundation as we transition from a traditional mobile telecommunications operator to an emerging digital operator. In line with our transition journey, MTN Ghana has declared 2020 as the ‘year of the customer: the digital experience’ with a focus on digitalisation as a tool to enhance customer experience as well as create value for our shareholders.”
Meanwhile, Mr. Adadevoh, in a response to Communications Minister Ursula Owusu-Ekuful’s comment in Parliament that the Common Platform introduced by government to monitor revenues of the telcos has saved government about GH¢300million which would have been lost, emphatically stated that the company has not shortchanged government in terms of tax payment.
“We haven’t been formally notified of any under-declaration of taxes; and at this point, as far as we are concerned, we have paid all taxes due to government. In typical audit processes, you receive a version of the document whereby you have the right to respond, to state your own position and clarify any issues.
“We haven’t received any notification of any specific issues as far as the tax declaration is concerned. We are compliant and we have reputable auditors who look at our books every year as well and certifying our accounts. So, in the event that there is more information on this, we will share that with the public as and when we get it,” he said.
Board Chairman of the company, Ishmael Yamson, indicated that MTN Ghana’s share price in the year under review dropped by some nine pesewas on the Ghana Stock Exchange (GSE), losing 11.4 percent for the year ending 31 December 2019.
“This were largely due to selling pressures from local retail and foreign institutional investors reducing their exposure due to bearish sentiments which plagued the market throughout the year, and demands on foreign funds to meet liquidity requests from clients. Generally, investors have confidence in MTN, albeit the potential risk to realising price gains due to the bearish sentiments in the market,” he said.
He disclosed that at the close of the year 2019, Scancom PLC (MTN Ghana) had a market capitalisation of GH¢8.6billion, making it the third-largest listed company on the Ghana Stock Exchange. It was also the most traded stock on the GSE, accounting for about 52.7 percent of market turnover.