MTN Rwanda, the biggest telecoms operator in the East African nation, on Friday reported a profit drop despite it seeing an increase in mobile subscribers.
In its results released for the quarter ended March 31, 2023, the group, which is also known as MTN Rwandacell, reported profit after tax (PAT) decreased by 32% to 2.8 billion Rwandan Francs (about R46 million) due to the impact of increased financing costs related to the CPI movements on lease payments.
The group reported mobile subscribers increased by 7.0% year-on-year (y/y) to 6.9 million, while active data subscribers decreased by 0.7% y/y to 2.2 million.
Service revenue increased by 14.9% to FRw 58.4bn, and earnings before interest, tax, depreciation and amortisation (Ebitda) grew by 9.4% to FRw 27.0bn.
Due to heightened competition in the industry, MTN Rwanda experienced a 0.5 percentage points (pp) drop in customer market share to 64.1%.
MTN Rwanda chief executive Mapula Bodibe said: "MTN Rwanda recorded solid top-line performance in the first quarter of 2023 in line with our service revenue medium-term guidance. [This] in spite of the continued challenging macroeconomic environment, where year-on-year CPI inflation rose by an average of 19.3% in March, a slight easing from 21.6% in December 2022, as a direct result of the government of Rwanda’s interventions to ease inflationary pressures to achieve the Central Bank’s 2023 guidance of 2-8% inflation growth for the year 2023".
She said that in the reported period, in line with the group's ambition to drive connectivity operations, MTN Rwanda had furthered its population coverage to 99.0% on the back of an FRw 12.9bn capex investment that saw a rollout of 34 sites in the period, which improved the group's network performance and enabled MTN Rwanda to regain its number 1 Network NPS position.
"There was a slight reduction in our active data subscribers to close the period with 2.2m subscribers at the end of the quarter. Smartphone penetration increased by 2.0pp to 23.5%, with more than 238 000 smartphones added to the base, adding to a total of 1.6 million smartphones in use.
"We expect that as our device financing solution, 'Macye Macye', continues to gain momentum, we will see growth in both active data subscribers and smartphone penetration."
On the fintech front, Bodipe said the group continued to achieve double-digit growth in its active Mobile Money subscribers, growing by 17.2% to 4.4 million subscribers, as well as delivering strong revenue growth of 39.4%, as MoMoPay merchants continued to grow, showcasing the popular rise in mobile payments across all spheres of modern-day life in Rwanda.
"We expect to deliver a continued solid performance from the fintech business, as more advanced payment products are rolled out in the course of this year," she said.
Looking ahead, Bodibe said: "We are looking forward to the launch and rollout of our own 4G network, scaling our Macye Macye device financing initiative, as well as the introduction of advanced mobile money products, which are all expected to drive growth in line with our midterm guidance. As we execute our Ambition 2025 strategy, we look forward to continuing to drive leading digital solutions for Rwanda’s progress."
MTN’s share price ended Friday 0.11% lower at R118.12.
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