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MTN Ghana delivers a strong performance for the year 2019

Dela Ahiawor

 

Highlights

 

MTN Ghana (Scancom PLC or MTNGH or the Company) delivered a strong performance for the year in a competitive industry, maintaining market leadership with 55.21%2 market share. Service revenue increased by 22.8% year-on-year (YoY), underpinned by growth in revenue from voice, data and Mobile Money (MoMo).

Double-digit growth in voice revenue (up 19.4% YoY) was driven by an increase in the number of active subscribers* (+11.2%), the benefits of various customer value management (CVM) initiatives and pro-consumer activity, as well as continued improvements to our network. As new lines of revenue continued to grow much faster than the traditional business, voice revenue’s contribution to service revenue decreased from 46.3% to 45.0%.

Solid data revenue growth (up 32.5% YoY) was attributable to growth in active data users# (+26.6%), growth in the number of smartphones (+18.5%) on the network and an increase in data usage (up 85.9% to 256,301 Terabyte). Data revenue’s contribution to service revenue expanded from 26.3% to 28.4%.

Mobile Money revenue continued to grow strongly (up 28.0%) in a year in which we marked the 10th anniversary of MoMo in Ghana. MoMo growth was attributable to an increase in the number of active subscribers* (+8.9%), commissions on cash-in-cash-out transactions, increased transactional activity of person-to-person (P2P) transactions as well as good growth in more advanced services – such as retail merchant payments. MoMo revenue’s contribution to service revenue expanded from 17.9% to 18.6%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 65.7% with a YoY EBITDA margin expansion of 13.2 pp to 50.8%. Under IAS 17 and adjusting for the management fee, the like-for-like EBITDA margin expanded by 5.9 pp to 43.5% (2018 EBITDA margin: 37.6%). The margin improvement was supported by lower operating expenses, prudent revenue initiatives as well as distribution efficiencies.

We continued to invest in our network and rolled out 280 2G, 557 3G, 900 4G and 100 rural telephony sites.

On the regulatory front, during the year the Payment Systems and Services Act 2019 was passed into law. This governs the way mobile money services are conducted. As required of existing players, we have applied for the new licence.

MTN Ghana continues to engage with regulatory stakeholders and maintains a firm focus on achieving continued improvements in customer experience.

Following the expiry of certain technology licences in 2019, the NCA has renewed our 2G licence for 15 years. We have submitted applications for the renewal of our International Gateway and Fixed Access licences, which are pending NCA approval.

We continued to invest in our communities, with the MTN Ghana Foundation support reaching a total of 149 projects since inception in 2007. In 2019, the foundation initiated eight new projects in education, three in health and one in economic empowerment.

The board of MTN Ghana declared an interim dividend of 2 pesewas per share after reviewing the mid-year performance of the Company. After reviewing the full year performance of the Company, the board of MTN Ghana shall be recommending a final dividend of 4 pesewas per share, bringing the total dividend for the 2019 year to 6 pesewas per share. This represents 73.1% of profit after tax and a 20.0% increase in dividend per share.

2019 marked the ‘year of the customer’ for MTN Ghana and in 2020 we are building on that foundation as we transition from a traditional mobile telecommunications operator to an emerging digital operator. In line with our transition journey, MTN Ghana has declared 2020 as the ‘year of the customer: the digital experience’ with a focus on digitalisation as a tool to enhance customer experience as well as create value for our shareholders.

 

2 Sourced from the National Communications Authority (“NCA”) Industry Information – Telecom Subscriptions for December 2019 report dated 10 February 2020 (www.nca.org.gh).

* Aligned with the MTN Group definition, subscribers are SIMs which generate or participate in an event that generates revenue for the company. Out of bracket numbers conform to the respective regulator subscriber definition.

# Active data subscribers as per MTN Group definition are data subscribers who have used more than 5MB in a month.

 

About MTN Ghana

MTN Ghana is the market leader in the increasingly competitive mobile telecommunications industry in Ghana, offering subscribers a range of exciting options under Pay Monthly and Pay As You Go Services and Mobile Financial Services. The company has committed itself to delivering reliable and innovative services that provide value for subscribers in Ghana’s telecommunications market. Since its entry into Ghana in 2006, MTN has continuously invested in expanding and modernizing its network in order to offer superior services to a broad expanse of the nation.

 

MTN GHANA (SCANCOM PLC) DELIVERS STRONG PERFORMANCE IN 2019

Highlights

 

IFRS 16 and IAS 17 comparison

  IFRS 16 as at

31 December 2019

GH¢ 000

 IAS 17 as at

31 December 2019

GH¢ 000

 IAS 17 as at

31 December 2018

GH¢ 000
Total revenue 5,181,836 5,181,836 4,218,847
Service revenue 5,148,158 5,148,158 4,193,815
EBITDA 2,630,433 2,200,219 1,587,629
EBITDA margin % 50.8% 42.5% 37.6%
Capex 1,112,4891 1,058,118 825,196
Profit before tax 1,443,374 1,575,456 1,079,194
Profit after tax 1,007,958 1,107,021 754,676

 

                                                                                                                 

 

 

 

 

 

* Aligned with the MTN Group definition, subscribers are SIMs which generate or participate in an event that generates revenue for the company. Out of bracket numbers conform to the respective regulator subscriber definition.

# Active data subscribers as per MTN Group definition are data subscribers who have used more than 5MB in a month.

1 Capex under IFRS 16 is made up of Capex spend (GH¢1,058m) and right of use (“RoU”) assets (GH¢54m) for the period.

Commentary

MTN Ghana (Scancom PLC or MTNGH or the Company) delivered a strong performance for the year in a competitive industry, maintaining market leadership with 55.21%2 market share. Service revenue increased by 22.8% year-on-year (YoY), underpinned by growth in revenue from voice, data and Mobile Money (MoMo).

Double-digit growth in voice revenue (up 19.4% YoY) was driven by an increase in the number of active subscribers* (+11.2%), the benefits of various customer value management (CVM) initiatives and pro-consumer activity, as well as continued improvements to our network. As new lines of revenue continued to grow much faster than the traditional business, voice revenue’s contribution to service revenue decreased from 46.3% to 45.0%.

Solid data revenue growth (up 32.5% YoY) was attributable to growth in active data users# (+26.6%), growth in the number of smartphones (+18.5%) on the network and an increase in data usage (up 85.9% to 256,301 Terabyte). Data revenue’s contribution to service revenue expanded from 26.3% to 28.4%.

Mobile Money revenue continued to grow strongly (up 28.0%) in a year in which we marked the 10th anniversary of MoMo in Ghana. MoMo growth was attributable to an increase in the number of active subscribers* (+8.9%), commissions on cash-in-cash-out transactions, increased transactional activity of person-to-person (P2P) transactions as well as good growth in more advanced services – such as retail merchant payments. MoMo revenue’s contribution to service revenue expanded from 17.9% to 18.6%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 65.7% with a YoY EBITDA margin expansion of 13.2 pp to 50.8%. Under IAS 17 and adjusting for the management fee, the like-for-like EBITDA margin expanded by 5.9 pp to 43.5% (2018 EBITDA margin: 37.6%). The margin improvement was supported by lower operating expenses, prudent revenue initiatives as well as distribution efficiencies.

We continued to invest in our network and rolled out 280 2G, 557 3G, 900 4G and 100 rural telephony sites.

On the regulatory front, during the year the Payment Systems and Services Act 2019 was passed into law. This governs the way mobile money services are conducted. As required of existing players, we have applied for the new licence.

MTN Ghana continues to engage with regulatory stakeholders and maintains a firm focus on achieving continued improvements in customer experience.

Following the expiry of certain technology licences in 2019, the NCA has renewed our 2G licence for 15 years. We have submitted applications for the renewal of our International Gateway and Fixed Access licences, which are pending NCA approval.

We continued to invest in our communities, with the MTN Ghana Foundation support reaching a total of 149 projects since inception in 2007. In 2019, the foundation initiated eight new projects in education, three in health and one in economic empowerment.

The board of MTN Ghana declared an interim dividend of 2 pesewas per share after reviewing the mid-year performance of the Company. After reviewing the full year performance of the Company, the board of MTN Ghana shall be recommending a final dividend of 4 pesewas per share, bringing the total dividend for the 2019 year to 6 pesewas per share. This represents 73.1% of profit after tax and a 20.0% increase in dividend per share.

2019 marked the ‘year of the customer’ for MTN Ghana and in 2020 we are building on that foundation as we transition from a traditional mobile telecommunications operator to an emerging digital operator. In line with our transition journey, MTN Ghana has declared 2020 as the ‘year of the customer: the digital experience’ with a focus on digitalisation as a tool to enhance customer experience as well as create value for our shareholders.

 

 

 

 

 

 

 

 

 

 

 

2 Sourced from the National Communications Authority (“NCA”) Industry Information – Telecom Subscriptions for December 2019 report dated 10 February 2020 (www.nca.org.gh).

* Aligned with the MTN Group definition, subscribers are SIMs which generate or participate in an event that generates revenue for the company. Out of bracket numbers conform to the respective regulator subscriber definition.

# Active data subscribers as per MTN Group definition are data subscribers who have used more than 5MB in a month.

 

Final dividend recommendation

Notice is hereby given that the company’s directors will be recommending to the shareholders at the annual general meeting to be held on 13 May 2020, the payment of a final dividend of GH¢ 0.04 per share for the 2019 financial year. This is subject to deduction of appropriate taxes. The number of ordinary shares in issue at the date of this declaration is 12,290,474,360.

Scancom PLC’s tax reference number is C0003632776. In compliance with the requirements of Ghana Stock Exchange (“GSE”) rules, the salient dates relating to the payment of the dividend are as follows:

Ex-Dividend Date                                Tuesday, 28 April 2020

Qualifying Date                                 Thursday, 30 April 2020

Dividend Payment date                           Monday, 25 May 2020

All shareholders registered in the books of Scancom PLC at the close of business on Thursday, 30 April 2020 will qualify for the final dividend.

In view of the foregoing, the ex-dividend date has been set as Tuesday, 28 April 2020. Consequently, an investor purchasing MTNGH shares before this date will be entitled to the final dividend. However, an investor buying MTNGH shares on or after Tuesday, 28 April 2020 will not be entitled to the final dividend.

On Monday, 25 May 2020 the dividend will be transferred electronically to the bank accounts or Mobile Money wallets of shareholders who make use of these facilities.

The dividend statement was approved by the board of directors of the Company on 25 February 2020 and signed on its behalf by:

 

Ishmael Yamson                                  Selorm Adadevoh

Chairman                                        Chief executive officer

 

 

This announcement is only a summary of the information in the full announcement and does not contain full or complete details. Please visit https://www.mtn.com.gh/investors/financial-reports for the full set of financial statements with notes, auditor’s report and directors’ report.

 

 

Fairland

26 February 2020

 

 

Lead sponsor

Tamela Holdings Proprietary Limited

 

Joint sponsor

J.P. Morgan Equities South Africa Proprietary Limited

 

 

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