Audited financial statements show the South Africa-based telco’s profit after tax declined by 13.17 percent to $1.12 billion from $1.29 billion in 2020.
The value of mobile money transactions rose by 56.8 percent to $239.4 billion while the number of transactions increased by 41.1 percent to 10 billion transactions in the same period.
MTN Group’s service revenue grew by 18.3 percent to $11.35 billion from $9.6 billion while data revenue rose by 36.5 percent to $3.73 billion.
Pan African mobile phone operator MTN Group’s net profit for the year ended December 31 fell by 13 percent despite a $77 million gain on the sale of its 12.95 percent shareholding in the Uganda subsidiary.
Audited financial statements show the South Africa-based telco’s profit after tax declined by 13.17 percent to $1.12 billion from $1.29 billion in 2020 as higher operational expenses more than offset the gains on the sale of 2.9 billion shares in MTN Uganda and the gains on the disposal of Yemen subsidiary for $53 million .
Total revenues for the telco with an estimated 272 million customers in 19 markets across the continent increased by only one percent to $12 billion from $11.85 billion in the same period.
According to the financial statements, financial technology (fintech) revenue, which comprises mobile money and airtime lending service, grew by 30.9 percent to $1.05 billion, with active Mobile Money (MoMo) customers increasing by 22.6 percent to 56.8 million.
The value of mobile money transactions rose by 56.8 percent to $239.4 billion while the number of transactions increased by 41.1 percent to 10 billion transactions in the same period.
Ayoba, the group’s instant messaging super app, reached 11.6 million monthly active user milestone as at December 31, 2021, representing an additional 6.1 million users since December 2020.
MTN Group’s service revenue grew by 18.3 percent to $11.35 billion from $9.6 billion while data revenue rose by 36.5 percent to $3.73 billion.
Total costs, on the other hand, increased by 14.3 percent largely due to higher spending on network rollout, increased commissions, impact of forex translations and non-operational and on-off items such as Covid-19 donations and arbitration settlement costs.
MTN South Africa’s business units achieved healthy growth, while MTN Nigeria and MTN Ghana delivered service revenue of more than 20 percent on a constant currency basis.
“The performance was underpinned by pleasing growth in our larger operating companies, operating leverage and the benefits of our expense efficiency programme,” said Ralph Mupita, the group’s president and chief executive.
In Uganda, MTN which is listed on the Uganda Securities Exchange, has offered to pay shareholders a dividend of $0.0013 per share after its net profit hit $94.4 million, driven by revenue growth in data, voice and fintech services.
The new normal
Revenues increased by 9.7 percent to $568.9 million from $ 518.3 million in 2020. With the exception of digital business segment revenue, which plunged to $1.2 million, from $1.5 million, MTN Uganda reported double-digit growth in data, fintech and other services.
From interconnection and outbound roaming, MTN Uganda raked in $278.1 million, from $267.9 million in 2020 driven by a 9.7 percent year-on-year total minutes of use by subscribers.
Fintech solutions including MTN mobile money payments, e-commerce, insurance, lending and remittance services generated $145 million.
In Rwanda, MTN continued to ride the wave of the new normal of digital transactions left behind by the Covid-19, to earn a 24.1 percent growth in service revenues to $182 million in 2021, buoyed by earnings from its mobile money and data products.
The subsidiary’s net profit grew by 10.9 percent to $21.8 million.
As the pandemic wreaked havoc for the biggest part of the last two years, the telco benefited from a Rwanda government decision to reduce cash transactions as one of the ways to control the spread of the coronavirus. This brought many people and business entities aboard the digital payment net.
The overall underlying margin improvement in 2021 was supported by an expense efficiency programme that realised a total of $244.57 million in efficiencies, with the largest savings recorded by MTN South Africa and MTN Nigeria.
The Group net debt reduced to $2.01 billion from $3.28 billion, driven by an improved operational cash position and debt repayments
“Our exit from the Middle East, in line with our pan-African strategy, is underway. In the year, the Group exited Syria and Yemen and we continue to explore options to exit Afghanistan,” they said.
Last year, MTN lost a telecom licence to operate in Ethiopia to the Global Partnership for Ethiopia consortium led by Safaricom.
MTN’s Ambition 2025 strategy focuses on supporting greater digital and financial inclusion across Africa while aligning to the development agendas of the African countries.
Every business entity was required to have a mobile money code through which merchants or passengers would pay digitally, and those that didn’t get codes would, at least, activate a mobile payment module, a trend which has caught on.
MTN Rwanda’s mobile Money revenue grew by 65.2 percent in 2021, with the telco recording up to 424,000 new subscribers, closing the year with 3.7 million mobile money subscribers.
Data revenue, which accounts for 17.4 percent of MTN Rwanda’s service revenue, grew by 18.9 percent.
Active data users rose by 31.3 percent to 2.1 million, while data usage increased and data traffic rose by 35.3 percent and 39.9 percent respectively.
Voice revenue increased by 12.1 percent and it accounted for 47.4 percent of total service revenue.
Its Fintech revenue recorded a 66.5 percent growth during the period under review.
Last year, MTN Group disposed of 2.9 billion shares in MTN Uganda to the public as part of an initial public offering, reducing the Group’s shareholding in the Ugandan subsidiary to 83.05 percent from 96 percent.
Of the 4.5 billion shares (20 percent of MTN Uganda) on offer, 2.9 billion were allocated, realising a net gain of $77 million.
“In 2021, we adapted to extraordinary circumstances brought about by the Covid-19 pandemic and started shaping the MTN of the future through the execution of our Ambition 2025 strategy,” said Mr Mupita.
“In a challenging macro-economic environment across our markets, we also experienced what we see as structurally higher demand for data services and accelerating transaction values in our fintech businesses.”
“Mobile Money remains a prime growth driver as it plays a critical role in enhancing financial inclusion. We aim to exponentially increase MoMo and ayoba active users to 100 million over the medium term as we move from a product to a platform play,” the company said.
The Group’s Ambition 2025 strategy is supporting greater digital and financial inclusion across Africa while aligning to the development agendas of nation states.
“Our target over the medium term is to grow our total subscriber base to 300 million, our mobile data users to 200 million data and our home broadband users to 10 million,” it said.
