MTN is set to issue an additional 12.5% of its investment as shares on the Ghana Stock Exchange (GSE), a move which is set to double its shareholding from the current 12.5% to 25%.
Recall that in September 2018, Scancom Plc., operators of MTN in Ghana, completed its Initial Public Offer (IPO) which saw 12.5% of its shares listed on the GSE as approximately 130,000 subscribers became shareholders of the company.
Contained in a statement accompanying its third-quarter result, which is signed by Selorm Adadevoh, CEO and Ishmael Yamson, Chairman, stressed that the focus is on increasing local shareholding.
“MTN Group has agreed with the Government of Ghana to sell down a further 12.5% of its investment in Scancom Plc. This process of further increasing localisation and deepening shared value is underway and we look forward to providing updates in future performance updates,” a portion of the statement read.
The move is set to consolidate MTN’s position at the pinnacle of the telecommunication sector as it remains the only company from the sector to be listed on the Exchange.
The statement further revealed that in 2021, in line with its commitment to the recovery of the economy post-pandemic and in celebration of its 25th anniversary, MTN Ghana has earmarked the equivalent of US$25 million, or GH¢150 million, to a fund supporting Ghana’s post-COVID-19 recovery measures.
“MTN Ghana will seek to further its strategic partnership with the Government of Ghana through investments in digital ecosystem projects as part of the government’s long-term transformation agenda,” a part of the statement indicated.
Figures
With the increased dependency on, and usage of, digital solutions, MTN has rolled out 115 2G, 115 3G and 547 LTE sites, consequently, Capital Expenditure (Capex) spend for the first three quarters of the year increased by 1.6% from GH¢862.5 million for the comparable period in 2019 to GH¢876 million this year for network capacity and infrastructure expansion projects.
The results showed an appreciation in every notable metric; with a Quarter over Quarter (Q/Q) increase in active subscribers – which are defined by MTN as ‘SIMs which generate or participate in an event that generates revenue for the company’ – by 8.7% to 23.4 million.
Despite the contribution of voice to service revenue seeing a decline from 45.0% to 42.5% year-on-year (YoY), primarily as a result of a shift to more data-centric services, voice revenue grew by 12.1%.
Service revenue increased by 18.8% from GH¢3.72 billion in 2019 to GH¢4.42 billion in 2020, supported by growth in voice, data, Mobile Money (MoMo) and digital revenue, as active data subscribers grew by 8.3% to 9.8 million resulting in an increase in YoY contribution to service revenue from 28.5% to 29.0% with active MoMo users appreciating by 4.3% to 10.2 million.
“Digital revenue continued its recovery (up 52.9%), driven by growth in the number of active subscribers (+13.7%) as well as improvements to our video and gaming offerings and increased adoption of our MyMTN and Ayoba messaging apps. Digital revenue contribution to service revenue increased from 3.4% to 4.4% YoY,” read a portion of the statement.
Total revenue saw growth to GH¢4.47 billion in the first three quarters, from GH¢3.75 billion over the same period in 2019, representing a 19.3% rise.
Additionally, reported Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) grew by 26.7% from GH¢1.88 billion to GH¢2.38 billion, with a corresponding margin expansion of 3.3 percentage points (pp) to 53.3%. Profit before tax and profit after tax increased by 51 and 53% respectively.
Outlook
With the economy regaining a semblance of normalcy, MTN has pledged to continue its expansion drive with more capital and related operating expenses to accommodate the growth and build resilience in all areas including cybersecurity.
“In the fourth quarter of the year, we continue our journey from a traditional mobile telecommunications operator to an emerging digital operator, with 2020 being the ‘Year of the customer: the digital experience,” the statement concluded.
