MTN Ghana misses 30% local ownership target despite strong 2022 financial results
MTN Ghana, the leading telecoms operator in Ghana, has missed its goal of increasing local ownership by 30% by the end of 2022, according to the company’s latest financial results. The local component of MTN’s ownership remained at 23.7% at the end of the year, the same as in the first quarter of 2022. The company’s CEO, Ralph Mupita, had expressed optimism in May 2021 that the target would be met, stating a desire to involve more Ghanaians in the telecoms firm’s success.
MTN Ghana’s share price has suffered since November 2021, hitting an 18-month low of GH¢0.75 in August 2022, amid a wider slump in the Ghana Stock Exchange (GSE) due to the introduction of an electronic transaction levy by the government. However, the company has seen a resurgence in recent weeks, appreciating by 5.68% year-to-date and 6.9% over the past four weeks to reach GH¢0.93 and a market capitalisation of GH¢11.4bn at the end of the first trading week in March, following the withdrawal of a GH¢8.2bn back-tax liability case levied against it by the Ghana Revenue Authority (GRA).
Despite the challenging market conditions, MTN Ghana’s service revenue grew by 28.3% to GH¢9.9bn in 2022, with earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by 30.9% to GH¢5.6bn. Furthermore, the EBITDA margin increased by 1.1 percentage points to 56.1%. The company’s mobile subscribers went up by 12.8% to 28.6 million, while active data subscribers increased by 8.3% to 13.5 million. Active Mobile Money (MoMo) users also saw significant growth, increasing by 15% to 12.7 million.
MTN Ghana’s total capital expenditure for 2022 was GH¢2.1bn, and the company paid GH¢3.7bn in direct and indirect taxes. It also allocated GH¢28.3m to socio-economic initiatives. Commenting on the results, CEO-MTN Ghana Selorm Adadevoh said: “As we aim for operational excellence in 2023 as a core pillar for sustaining bottom-line growth for the business in the medium-term, we acknowledge the macroeconomic headwinds that may impact the business environment and our operations. After careful consideration of these factors and after evaluating our commercial strategy, we are reviewing MTN Ghana’s guidance of service revenue growth from mid- to high-teens to low-twenties in percentage terms.”
MTN Ghana has proposed a final dividend per share of GH¢0.124, a 42.6% increase from the previous year’s GH¢0.085 per share. Consequently, the total dividend per share for 2022 rose to GH¢0.164. This, MTN said, is consistent with its policy of allocating 70.6% of the profit after tax to dividends.
MTN Ghana’s failure to meet its local ownership target may come as a disappointment to some stakeholders, as the company had expressed a desire to involve more Ghanaians in its success. However, the company’s strong financial performance in the face of challenging market conditions is a testament to its resilience and ability to adapt to changing circumstances. As the Ghanaian economy continues to recover from the impact of the COVID-19 pandemic, MTN Ghana’s outlook remains positive, and the company is well-positioned to capitalize on the opportunities presented by Ghana’s rapidly growing digital economy.
