… as profit rises 38.4% year on year
MTN Ghana paid dividends amounting to GH¢860.3million to its shareholders in 2020, a 40% increase on the GH¢614.5 million paid the previous year. The figure consists of an interim dividend of GH¢368.7million at GH¢0.03 per share, paid for full-year 2020; and a final dividend of GH¢491.6million at GH¢0.04 per share, for the financial year ended 31 December 2019.
This was contained in the end of year audited financial statement by the Accra bourse-listed company, which shows that profit after tax grew by 38.4% Year-on Year (YoY) from GH¢1billion as at 31 December 2019 to GH¢1.4billion in 2020, as retained earnings remained north of GH¢2.2billion.
With directors of the company recommending payment of GH¢614.5million at GH¢0.05 per share as final dividend for the year under consideration; this brought total dividend for the year to GH¢0.08 per share and represents a 70.5% and a 33.3% of profit after tax and increase in dividend per share respectively, over those paid for 2019. The ex-dividend date has been set for Wednesday, 12 May 2021.
MTN Ghana continued to deliver an industry-leading performance with total revenue of GH¢6billion, representing a 16.4% appreciation YoY – as reported Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) grew by 20.8 % from GH¢2.63billion to GH¢3.2billion, with a corresponding margin expansion of 1.9 percentage points (pp) to 52.7%.
Service revenue grew by a similar margin to total revenue YoY, driven by growth in voice, data, mobile financial services and digital. Growth in voice revenue, up 8.1% YoY, was supported by a 23.4% increase in active subscriber base to 24.4 million.
However, the contribution of voice to service revenue continued its downward trend; dropping from 45.0% to 41.8% as consumers favoured data-centric options in light of increased digitisation spurred by the ongoing pandemic.
This saw data revenue appreciate by 21.3% YoY on the back of a 32.4% increase in the number of active data users, with the average consumer expending 3.5GB to 4GB monthly. Data revenue contribution to service revenue thus increased from 28.4% to 29.6% YoY.
Digital payments saw a quantum leap as Mobile Money revenue grew by 32.2% YoY, with the number of active users rising by 16.3% to 10.6 million – at par with the number of data users. The growth was, in part, attributed to the zero-rating of all Mobile Money person-to-person (P2P) transfers up to a value of GH¢100 per day; a move that is reported to have saved customers over GH¢94million in fees.
Capex expenditure grew, mostly in Q4, with the easing-up of supply chains – as GH¢1.49billion was invested in network capacity and infrastructure expansion.
“As part of this, 200 2G, 200 3G and 950 LTE sites helped relieve the pressure on our infrastructure and significantly enhance our service delivery across the nation. Our smart capex deployment helped support a 105% growth in data traffic and reach 1,875 total 4G sites nationwide (71.7% 4G population coverage), as we continue our mission to have 4G on every site in the coming years,” the report reads.
Significant Market Power
Speaking during an earnings-call to discuss the results, Chief Executive Officer of MTN, Selorm Adadevoh, revealed that talks on implementation of the remaining six out of seven directives mandated by the National Communications Authority (NCA) have stalled; as a result of the just-ended general elections as well as absence of a substantive sector minister.
Having implemented the directive to apply a 30% asymmetrical interconnect rate for two years, he gave reassurance of MTN’s commitment to the course. “Our primary objective is to get to point where the remedies implemented have a long-term impact on sustainability of the industry, and that is very important as it will ensure the objectives of SMP are met broadly,” he said.
Offering a service revenue growth guidance range of 13% to 15%, Mr. Adadevoh stated that his outfit is cautiously optimistic of an economic upturn; and promised that the year, which has been dubbed the ‘Year of the customer: the digital experience’ in line with MTN Ghana’s 25-year anniversary, will see a prioritisation of infrastructure expansion to meet the needs of Ghanaians in this era of accelerated digitalisation.
By the end of December 2020, GH¢1billion had been paid in taxes and the cumulative value of MTN Ghana’s efforts to fight COVID-19 stood a GH¢139million. “As we progress through 2021,” he said, “We will continue to make COVID-19 expenditure for as long as it is necessary.”