MTN Rwanda Reports Decline in Profit Despite Subscriber Growth

KIGALI: MTN Rwanda Plc has announced a 307.1% decrease in Profit after Tax (PAT), totalling Rwf 10.5 billion for the first half of 2024. The company's reviewed interim financial results, released on August 13, 2024, reveal the business was adversely affected by lower EBITDA and increased depreciation on tower leases, driven by the rollout of additional sites.

EBITDA, which stands for Earnings Before Interest, Tax, Depreciation, and Amortisation, decreased 29.0% to Rwf 39.0 billion. EBITDA serves as an alternative measure of profitability to net income.

Here Are the Key Performance Indicators:

• Total subscribers grew by 7.5% to reach 7.5 million, with 523,000 new subscribers added.
• Active data subscribers went up by 0.6% to 2.3 million.
• Active Mobile Money (MoMo) subscribers increased by 15.0% to 5.1 million.
• Service revenue rose by 0.8% to Rwf 121.5 billion. This revenue comes from activities performed by MTN operations or business units using a base transmission station (BTS).
• Profit after Tax (PAT) fell to Rwf 10.5 billion.
• Rwanda's macroeconomic environment is expected to stay relatively stable in the second half of 2024.

Despite the decline in profit, MTN Rwanda reported notable growth in its mobile and MoMo subscriber base, while data subscribers remained relatively flat. Mobile subscribers grew by 7.5% to 7.5 million, adding 523,000 new subscribers. Active mobile money (MoMo) subscribers increased by 15.0%, reaching 5.1 million. Active data subscribers rose slightly by 0.6% to 2.3 million, with 1.5 million being 4G users.

The company’s voice and data revenue did not reflect the growth in subscriber base. Service revenue showed a modest increase of 0.8% year-over-year, driven by solid growth in fintech and enterprise business revenue. However, voice revenue fell by 24.3% YoY, attributed to the zero mobile termination rate (MTR) regulatory directive on interconnect revenues. 

According to the financial results also published on the company website, without the zero MTR, normalised voice revenue would have been 3.2% lower, and overall service revenue would have seen an 8.6% increase.

Service revenue is generated from activities performed by MTN operations or business units using a base transmission station (BTS). Other MTN revenue streams include Xtratime, Digital, SMS, Wholesale, Fixed connectivity, managed services, cloud and Internet of Things (IoT).

The results indicate that data revenue decreased by 1.6% YoY due to aggressive market pricing competition. In response, MTN Rwanda says that it introduced affordable and competitive data packages using innovative pricing and customer value management strategies to enhance revenue and maintain market share.

The number of smartphones connected to MTN Rwanda's network increased by 39.0% YoY to approximately 2.4 million, with smartphone penetration rising by 7.2% YoY to 31.7% in June 2023. This increase is attributed to the #ConnectRwanda 2.0 campaign, which distributed affordable #Ikosora 4G smartphones over the past three months.

MTN Rwanda said it continues to engage closely with the regulator, Rwanda Utilities Regulatory Authority (RURA), on critical issues affecting its operations and financial performance, such as the zero-rating of local mobile termination rates (MTR) and the impact of rising One Network Area (ONA) interconnect charges from permanent roamers in Uganda and South Sudan.

The company remains committed to navigating regulatory and competitive challenges and achieving its Ambition 2025 strategic priorities. Focus areas include accelerating service revenue growth, driving cost efficiencies, and creating shareholder value through strategic commercial initiatives and stakeholder engagements.

“We are focused on executing key strategic priorities to accelerate service revenue growth, drive cost efficiencies, and continue creating value for our shareholders. Our commercial initiatives, stakeholder engagements, and focus on efficiency will deliver better performance results in the second half of the year.”

MTN Rwanda defines mobile subscribers as those active within 90 days and active Data and MoMo users as active within 30 days.

Click here to read the full ‘MTN Reviewed Results (half year ending 30 June 2024)

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