Ghana: MTN misses 30% localisation target

MTN Ghana has fallen short of its goal to increase its local ownership by 30 percent by end of 2022, according to the company’s financial results.

The local component of MTN’s ownership was 23.7 percent at end of the year; the same as first-quarter 2022.

In May of 2022, the company’s Group Chief Executive Officer (CEO), Ralph Mupita, expressed optimism that the target would be met – citing a desire to involve more Ghanaians in the telecommunication firm’s success.

“We have committed as the MTN Group to further localise and have more Ghanaians owning the shares of MTN Ghana and we want to get to 30 percent, which is the target we are committed to. We have made progress; we are now at precisely 23.7 percent, so we have another 6.3 percent of shares to localise,” he said at the time.

“We think more and more Ghanaian individuals and institutions should own part of the assets and drive deeper liquidity in the local market so the stock price can go up. Liquidity is obviously a function, and we are very alive to the fact of what the MTN shares do on the Ghanaian stock exchange,” the MTN Group CEO added.

Since these remarks, MTN – market leader on the Ghana Stock Exchange (GSE) in volume and value terms – has endured a torrid time along with the rest of the market.

Its share price began tumbling in November 2021, shortly after announcement of the E-levy, from an all-time high of GH¢1.33 to close the year at GH¢1.11. The slump continued into 2022 to reach an 18-month low of GH¢0.75 in August. It then maintained a share price of GH¢0.88 for much of the rest of the year.

It has however seen a resurgence – appreciating by 5.68 percent year-to-date and 6.9 percent over the past four weeks to reach GH¢0.93 and a market capitalisation of GH¢11.4billion at the end of the first trading week in March, on account of its strong results and the withdrawal of a GH¢8.2billion back-tax liability case levied against it by the Ghana Revenue Authority (GRA).

2022 performance

Despite the harsh operational conditions, MTN’s service revenue grew by 28.3 percent to GH¢9.9billion, with earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by 30.9 percent to GH¢5.6billion in 2022. Furthermore, the EBITDA margin increased by 1.1 percentage points to 56.1 percent.

This occurred as the company’s mobile subscribers went up by 12.8 percent to 28.6 million, while active data subscribers increased by 8.3 percent to 13.5 million. Active Mobile Money (MoMo) users also saw significant growth, increasing by 15 percent to 12.7 million.

MTN Ghana’s total capital expenditure for 2022 was GH¢2.1billion, and the company paid GH¢3.7billion in direct and indirect taxes. It also allocated GH¢28.3million to socio-economic initiatives.

Commenting, 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.”

The company has proposed a final dividend per share of GH¢0.124 – a 42.6 percent 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 percent of the profit after tax to dividends.