Ghana’s telecommunications giant, MTN Ghana, has emerged as a shining example of success in the Telco’s industry, as reflected in its robust financial report for the year 2023. With a remarkable total revenue growth of over 30% compared to the previous year, MTN Ghana has demonstrated not only resilience but also strategic prowess in overcoming the muddy economic waters troubling the country in recent times.
The key driver behind this all-round impressive growth lies in MTN Ghana’s targeted business strategies, which have effectively bolstered revenues across various segments including Voice, Data, and Mobile Money. By identifying and capitalizing on emerging opportunities within the market, MTN Ghana has positioned itself as a frontrunner in meeting the evolving needs of its customer base.
As part of the company’s commitment to disciplined execution, the management team executed the expense efficiency program proactively to control costs, maintaining profitability, and driving sustainable business growth.
As a result, the company has achieved an outstanding year-on-year (YoY) growth in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) by an impressive 40.2%.
Moreover, the uptick in EBITDA margin from 56.1% in 2022 to 58.4% in 2023 accentuates MTN Ghana’s relent- less pursuit of operational excellence. By optimizing operational efficiency and enhancing cost-effectiveness, MTN Ghana has not only fortified its financial performance but has also solidified its position as a market lead- er in the telecommunications sector.
Significant Revenue Growth
MTN Ghana achieved a remarkable year- on-year increase of 34.6% in total revenue, reaching an impressive GHS13.3 billion in 2023. This substantial growth, can be attributed to MTN Ghana’s well-executed commercial strategies, which have focused on enhancing network quality, expanding coverage, and delivering superior customer experiences.
Despite facing challenges such as a 6.3% year-on-year decrease in subscriber base due to the national SIM re-registration exercise, MTN Ghana’s unwavering dedication to providing high-quality services has helped mitigate the impact on its business. By prioritizing customer satisfaction and retention, MTN has demonstrated resilience in the face of regulatory changes and market dynamics.
In 2023, MTN Ghana reaffirmed its commitment to infrastructure development by investing a total of GHS4.1 billion in capital expenditure. These investments were aimed at modernizing infrastructure, enhancing IT systems, and expanding network capacity and coverage nationwide. Notably, MTN deployed 350 2G, 353 3G, and 350 4G sites, achieving an impressive 99.3% 4G population coverage, thus ensuring widespread access to high-speed connectivity.
Voice revenue witnessed a notable 9.0% year-on-year growth to GHS3.6 billion, driven by customer value management initiatives and improved network quality. However, the contribution of voice to total service revenue declined, reflecting evolving customer preferences and global trends.
Meanwhile, data revenue experienced a substantial 50.9% year-on-year growth to GHS5.8 billion, supported by in- creased data consumption per user and strategic pricing initiatives. MTN’s focus on offering relevant data packages and investing in network infrastructure has fuelled the demand for high-speed data services, resulting in a significant increase in data revenue contribution to total service revenue.
Mobile Money Revenue Growth
Mobile Money revenue growth recovered, with a YoY increase of 48.8% to GHS2.9 billion, as the company continues to provide convenient and secure financial services to its active users (up 20.1% YoY). MTN’s partnerships with various financial institutions, agents, and merchants have enabled it to expand the mobile money ecosystem; making it easier for customers to transfer money to others, make payments at merchant points, save, and access micro-loans, micro-insurance, and international remittance services among others.
These helped increase the contribution of advanced services to Mobile Money revenue by 2.6pp to 27.0% over the previous year’s contribution of 24.4%. The overall contribution of Mobile Money revenue to total service revenue increased from 19.6% to 21.7% YoY.
The decline in digital revenue slowed, with a decrease of 4.7% YoY to GHS137.4 million. H2 2023 digital revenue grew sequentially by 15.6% over H1 2023, supporting its optimism for a revenue growth continuation in 2024. This reflected its efforts to enhance customer experience, as well as to rationalise its digital product portfolio.
MTN Ghana also recorded an increase of 28.6% YoY in the number of active digital subscribers, reaching a total of 4.6 million. MTN Ghana’s primary focus is on improv- ing the myMTN application and expanding the music and game offerings on Ayoba. The contribution of digital to total service revenue decreased from 1.5% to 1.0% YoY.
Meanwhile, net finance cost increased by 81.1% YoY to GHS486.2 million due to a relatively higher finance cost compared to finance income. Finance cost increased by 63.3% YoY primarily due to currency depreciation which resulted in unrealised losses on Dollar-denominated capex, and high levels of inflation and interest rates on lease costs.
The finance cost was partially offset by a 40.2% YoY increase in finance income, primarily from gains on surplus cash invested in call and fixed-term deposits. Depreciation and amortization increased by 43.9% YoY to GHS1.7 billion. Consequently, profit after tax increased by 39.4% YoY to GHS4.0 billion.
Huge Taxes to the Government
In 2023, MTN Ghana reaffirmed its commitment to being a key development partner to the Government, playing a pivotal role in the country’s fiscal and socio-economic advancement. Through substantial contributions to taxes, fees, and levies, MTN Ghana demonstrated its dedication to supporting the nation’s growth agenda while fostering a conducive environment for sustainable development.
With a significant payment of GHS5.9 billion in direct and in- direct taxes, alongside GHS0.4 billion in fees, levies, and other payments to Governmental agencies, MTN Ghana’s total contributions amounted to an impressive 47.1% of its total revenue for the fiscal year. This substantial financial commitment underscores MTN Ghana’s pivotal role in driving government revenue and supporting essential public services and infrastructure.
Moreover, MTN Ghana’s corporate income tax obligations saw a notable increase, total- ling GHS1.6 billion in 2023, reflecting the company’s robust financial performance and its adherence to tax compliance standards. Despite economic fluctuations and regulatory changes, MTN Ghana remains steadfast in its commitment to fulfilling its tax obligations and contributing to nation- al development initiatives.
Payment of Dividends
In 2023, MTN Ghana continued to deliver robust financial performance, with a noteworthy increase in profit after tax and earnings per share (EPS), reflecting the company’s resilience and strategic initiatives. Bolstered by the issuance of scrip dividends, MTN Ghana achieved a remarkable profit after tax of GHS4.0 billion, marking a significant 39.4% year-on-year growth, while EPS surged by 29.5% to GHS0.301. This remarkable growth in profitability is a testament to MTN Ghana’s strong operational performance and strategic initiatives aimed at driving sustainable business growth.
In line with its commitment to creating value for shareholders, the Board approved an interim dividend of GHS0.05 per share and recommended a final dividend of GHS0.175 per share for the 2023 financial year. This decision resulted in a substantial 47.8% year-on-year increase in total cash dividend to GHS3.0 billion, translating to a 37.2% year-on-year increase in dividend per share to GHS0.225. Such generous dividends underscore MTN Ghana’s dedication to rewarding its shareholders for their investment and trust in the company.
Throughout the period, MTN Ghana maintained a prudent approach to financial management, ensuring a healthy balance sheet and compliance with debt covenants agreed upon with syndicated lending partners. By prioritizing fiscal responsibility, MTN Ghana successfully managed its debt, with a debt balance of GHS225 million by the end of 2023. This disciplined approach to debt management reflects MTN Ghana’s commitment to long-term financial stability and sustainability
MTN Makes GHS59.9 million Savings
Despite facing a high inflationary environment, MTN Ghana demonstrated remarkable cost management capabilities, resulting in significant savings of GHS59.9 million in 2023. This achievement underscores MTN Ghana’s commitment to efficiency and its proactive approach to mitigating the impact of macroeconomic challenges on its operations.
The company’s disciplined spending and focus on identifying efficiencies played a crucial role in maintaining cost discipline amidst the challenging economic terrain. Despite a 37.9% growth in the cost of sales and a 19.0% increase in operational costs, MTN Ghana’s prudent cost management practices helped to mitigate the overall impact on its financial performance.
In parallel, MTN Ghana’s strategic allocation of capital expenditure, totalling GHS4.0 billion, has been instrumental in enhancing net- work capacity and expanding infrastructure. With investments focused on property, plant, and equipment (PPE), software, and other intangibles, MTN Ghana has laid a strong foundation for continued growth and innovation.
Notably, the company’s exlease capex growth surged by 66.6% year-on-year, with a corresponding ex-lease capex intensity of 24.6%. However, MTN Ghana aims to reduce this intensity in the medium to long term, reflecting its commitment to optimizing capital expenditure efficiency.
In USD terms, core capex deployed witnessed a significant 33.4% year-on-year increase to USD275.2 million, driven by currency depreciation and spectrum acquisition. Despite currency fluctuations, MTN Ghana remains steadfast in its strategic investment approach, ensuring sustainable growth and long-term value creation.
During the period under re- view, MTN recorded a 43.9% year-on-year increase in depreciation and amortization expenses, amounting to GHS1.7 billion. Finance cost increased by 63.3% year-on- year attributable to currency depreciation, which resulted in unrealised losses on US dollar-denominated capex, and also attributable to the high levels of inflation and interest rates on lease costs.
The finance cost was partially offset by a 40.2% YoY increase in finance income, primarily from gains on surplus cash invested in call and fixed-term deposits. As a result, net finance costs increased by 81.1% year-on- year, leading to an increase of 36.5% in profit before tax, totalling GHS5.6 billion.
MTN Ghana Foundation Commits to Supporting 500 MSMEs with GHS5 million
In a bid to foster economic empowerment and promote inclusivity, the MTN Ghana Foundation has embarked on a bold initiative to support micro, small, and medium enterprises (MSMEs) through its Enterprise Support Program. With a dedicated focus on youth, women, and ‘differently abled’ entrepreneurs, the program aims to provide essential resources and opportunities for growth to 500 MSMEs across Ghana.
The project’s rollout began with on-boarding programs held in key cities such as Accra, Kumasi, and Takoradi, where participants were equipped with training, business development support, technical assistance, and seed funding. To date, 134 beneficiaries have received support, with each entrepreneur receiving up to GHS10, 000.00 in funding. With a commitment to transparency and accountability, the MTN Ghana Foundation has disbursed GHS988, 000.00, nearing the completion of its GHS1, 000,000.00 allocations to beneficiaries.
Furthermore, beneficiaries have been integrated into the vibrant MTN MoMo Market, an e-commerce platform boasting over 20 million customers, providing MSMEs with unprecedented access to a vast consumer base.
Commenting on the program, the Chief Corporate Services and Sustainability Officer of MTN Ghana, Adwoa Wiafe said,
“In line with our diversity and inclusion drive, we made a conscious effort to select businesses that have clear social and environmental impact and align with our sustainability objectives and the UN Sustainable Development Goals. We were also interested in businesses with digital components since we are accelerating our digital inclusion agenda.”
The MTN Enterprise Support Programme is in partnership with the Innohub Foundation and was launched in March 2023. The MTN Ghana Foundation has been operating since November 2007 as the vehicle to select and implement MTN’s Corporate Social Investments. From its inception to date, the Foundation has undertaken 166 major projects across the country.
MTN Ghana’s Commitment to Shared Value and National Priorities
MTN Ghana has long recognized the importance of creating shared value and responding to national priorities as integral components of its corporate ethos. Through a multifaceted approach that combines Corporate Social Investment (CSI) initiatives with a strategic focus on digital transformation, MTN Ghana is driving socio-economic development and accelerating Ghana’s progress in the digital age.
At the heart of MTN Ghana’s commitment to shared value is the MTN Ghana Foundation, which spearheads various social interventions aimed at uplifting underserved communities. With a track record of over 166 major projects implemented nationwide, the MTN Ghana Foundation has become a beacon of hope, providing critical support in areas such as health, education, and economic empowerment.
In line with the company’s overarching strategic direction and the Government of Ghana’s digitalization agenda, the MTN Ghana Foundation embarked on a new course in 2023. By aligning 75% of its projects with digital-related initiatives and dedicating the remaining 25% to other national priorities, MTN Ghana is actively contributing to efforts aimed at accelerating digital access and usage across the country.
In 2023, MTN Ghana in collaboration with Government, launched the “Ghana Innovation Hub” project which is aligned to its Ambition 2025 strategic objective of leading the delivery of digital solutions for Ghana’s progress. The ICT Hub project along with the “Accra Innovation City” and “The Ghana Education Platform” projects are spearheaded by MTN Ghana in partnership with the Government and other partners. So far, MTN Ghana has made a commitment of US$25 million towards the ICT Hub project.
2023: A Year of Awards and Recognitions
In 2023, MTN Ghana continued to solidify its position as a leader in the telecommunications industry, earning widespread acclaim and recognition for its outstanding contributions and achievements. Throughout the year, MTN Ghana and its esteemed executives received a total of twenty-six prestigious awards from various esteemed institutions, underscoring the company’s commitment to excellence and innovation.
At the forefront of MTN Ghana’s accolades was Selorm Adadevoh, who was honored as the MTN CEO of the Year at the esteemed MTN Leadership Gathering Conference in Johannesburg, South Africa. Under his visionary leadership, MTN Ghana garnered addition- al recognition at the MTN Group level, winning coveted awards such as the Best Environmental, Social, and Governance (ESG) Award and the Best OPCO in future-fit talent and culture award, showcasing the company’s commitment to sustainability and organizational excellence.
Furthermore, the MTN Ghana Foundation received commendation for its invaluable contributions to the fight against COVID-19 at the prestigious 2023 National Honors and Awards ceremony. Recognized for its distinguished service, the Foundation was awarded a plaque and certificate, highlighting its unwavering dedication to supporting communities in times of crisis.
Overcoming the Challenges of 2024
Looking ahead to 2024, MTN Ghana acknowledges the prevailing macroeconomic challenges expected to persist in the Ghanaian market. De- spite forecasts of a decrease in inflation throughout the year, the anticipated year-end rate of 15% still poses significant hurdles, surpassing the Bank of Ghana’s target range.
Amidst these economic headwinds, MTN Ghana remains steadfast in its commitment to investing in its network, IT systems, and infrastructure. With a dedicated capex envelope of GHS2.5 billion for 2024, the company aims to enhance customer experience and create long-term value for stakeholders. These strategic investments will not only facilitate growth but also ensure improved services for both new and existing customers, aligning with the company’s Ambition 2025 objectives.