MTN Ghana (Scancom PLC), the country’s leading telecommunications provider, has announced impressive financial and operational results for the first quarter ended 31 March 2025, underscoring its resilience amid a challenging macroeconomic environment marked by elevated inflation and cedi depreciation.
Despite facing a 23.0% average inflation rate and a 17.1% year-on-year (YoY) depreciation of the Ghana cedi against the US dollar, MTN Ghana posted a 39.6% YoY increase in service revenue, reaching GHS5.3 billion—well above its medium-term guidance and inflationary benchmarks.
Key Revenue Drivers
MTN Ghana’s growth trajectory was propelled by robust performances across its core revenue segments:
- Data Revenue surged by 54.9% YoY to GHS2.8 billion, now representing 52.6% of total service revenue (up from 47.4% in Q1 2024). This reflects increasing data consumption among subscribers, which rose 39.7% YoY to 13.4GB per user/month.
- Mobile Money (MoMo) revenue climbed by 53.1% YoY to GHS1.3 billion, supported by a 44.8% growth in basic services and a 72.4% rise in advanced services. MoMo now contributes 24.9% to total revenue, up from 22.7%.
- Voice Revenue recorded a modest 6.2% increase to GHS951.0 million, although its share of total revenue dropped to 17.8%, reflecting a broader customer shift toward data usage.
- Digital Revenue accelerated by 65.4% to GHS82.1 million, signaling MTN’s growing footprint in digital content and services.
Profitability and Efficiency
MTN Ghana’s profitability metrics were equally impressive:
- EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) rose by 45.0% YoY to GHS3.1 billion, underpinned by strong top-line growth.
- The EBITDA margin expanded by 2.2 percentage points to 58.1%, demonstrating enhanced operational efficiency despite inflationary cost pressures.
- Profit Before Tax grew by 52.0% to GHS2.4 billion, while Profit After Tax (PAT) increased by 53.7% to GHS1.7 billion.
- Earnings Per Share (EPS) rose significantly by 53.7%, from GHS0.084 to GHS0.1292, enhancing shareholder value.
Investment and Financial Strength
- Total Capital Expenditure (Capex) for the period was GHS1.2 billion, a slight 3.6% decline YoY. However, ex-lease Capex soared by 138.3% to GHS0.8 billion, reflecting continued investments in network expansion and IT systems to support long-term growth.
- Mobile subscribers reached 29.2 million (+5.2% YoY), while active data users grew to 17.8 million (+10.8%). MoMo users increased by 11.5% to 17.4 million, with transaction volumes up 19.7% and transaction value up an impressive 94.8%.
- MTN Ghana generated GHS1.9 billion in operating cash flow, ending the quarter with GHS3.8 billion in cash and cash equivalents. Total assets rose to GHS45.7 billion, while equity increased to GHS12.2 billion, showing a solid balance sheet.
Regulatory Tailwinds and Strategic Outlook
A significant regulatory development—the abolition of the e-levy on MoMo transactions—is expected to further catalyze growth in the mobile money ecosystem by reducing user transaction costs and promoting financial inclusion.
Looking ahead, MTN Ghana is focused on implementing its Ambition 2025 strategy, which emphasizes:
- Sustained revenue growth, particularly in data and MoMo
- Operational efficiency and margin protection
- Enhanced customer experience through digital and AI tools
- Strategic investments in platform and network infrastructure
The company has revised its medium-term service revenue growth guidance upward to the low-to-mid-thirties percentage range, with margins anticipated to remain in the mid-fifties.
Commitment to Ghana
MTN Ghana continues to be a key contributor to national development, having paid GHS2.7 billion in direct and indirect taxes during Q1 2025. The MTN Ghana Foundation remains active in community development projects across health, education, and economic empowerment.
Forecast and Recommendation for MTN Ghana Shareholders – FY 2025
Forecast
Based on MTN Ghana’s Q1 2025 performance, we project the following key trends for the full year 2025:
- Full-Year Service Revenue Growth:
- Expected to grow between 34%–38%, surpassing previous medium-term guidance, fueled by continued expansion in data and mobile money (MoMo) services.
- Data revenue will likely exceed 55% of total service revenue by Q4 2025.
- EBITDA and Profit Margins:
- EBITDA margin is projected to remain stable to slightly improved, closing the year around 58–59%, reflecting disciplined cost management amid inflation and cedi depreciation.
- Full-year Profit After Tax (PAT) is forecasted to rise by 45%–55%, potentially reaching GHS 6.5–7 billion if current momentum continues.
- Mobile Money (MoMo):
- With the removal of the e-levy, user activity and transaction volumes are expected to accelerate.
- We anticipate transaction value growth of over 80% YoY, reinforcing MoMo’s role as a major revenue contributor.
- Capital Expenditure (Capex):
- Continued investment in network capacity and IT systems may push ex-lease Capex beyond GHS 2.5 billion for the year, aligned with MTN’s Ambition 2025 strategy.
- Dividend Outlook:
- Given improved cash flow and earnings, dividends per share (DPS) may see an upward revision, potentially growing in line with EPS (~53% YoY increase in Q1), offering enhanced shareholder returns.
Recommendation
EcoCapital Investment Management issues a “BUY” recommendation on MTN Ghana shares, with the following rationale:
Strong Earnings Momentum:
The Q1 2025 results set a solid foundation for continued profit growth, despite macroeconomic volatility.
Robust Digital & Fintech Expansion:
High double-digit growth in data and MoMo segments positions MTN as a digital transformation leader in Ghana.
Operational Resilience:
Effective cost controls and network investments indicate a well-run operation capable of navigating inflation and forex challenges.
Attractive Returns:
EPS growth of over 50% YoY and expected dividend enhancements make MTN Ghana an attractive income and growth play.
Macroeconomic Tailwinds:
The removal of the e-levy and potential fiscal easing could further support telecom sector growth and consumer engagement.
Target Price Estimate (12-month):
Given the earnings trajectory and historical valuation multiples, EcoCapital places a target price range of GHS 3.90 – GHS 4.50 per share by Q1 2026.
Conclusion
MTN Ghana’s Q1 2025 results reflect a business that is financially sound, operationally efficient, and strategically aligned for future growth.
Despite macroeconomic headwinds, the company’s strong revenue growth, profitability, capital investment, and positive regulatory developments position it as a resilient and attractive investment for shareholders.
For further information or in-depth financial analysis on MTN Ghana or other listed equities, please contact the team at EcoCapital Investment Management for professional financial advisory services.
