Overview:
For the nine months ending September 2024, the company reported a 29.6% increase in profit after tax, amounting to UGX 459.4 billion. This growth was fueled by a 20.1% rise in service revenue, with data and fintech segments experiencing 30.1% and 23.5% growth, respectively.
MTN Group, the South African telecommunications giant, has strategically profited from the sale of its stake in MTN Uganda, driven by regulatory compliance and market expansion objectives.
In November 2021, MTN Uganda launched its IPO, offering 12.97% of its shares at UGX 200 each. This move was in response to the Uganda Communications Commission’s directive for telecom operators to ensure at least 20% local ownership. Despite being undersubscribed, the IPO raised UGX 535 billion, marking it as Uganda’s largest at the time .
To fulfill the remaining local ownership requirement, MTN Group initiated a secondary share sale in May 2023, offering an additional 7.03% stake at a discounted price of UGX 170 per share. Investors were incentivized with 30 bonus shares for every 140 purchased, effectively providing a 17.64% discount.
MTN Uganda’s robust financial health has been pivotal in enhancing the value of MTN Group’s retained stake. For the nine months ending September 2024, the company reported a 29.6% increase in profit after tax, amounting to UGX 459.4 billion. This growth was fueled by a 20.1% rise in service revenue, with data and fintech segments experiencing 30.1% and 23.5% growth, respectively.
Ralph Mupita, MTN Group President and CEO said: “With this listing, MTN Uganda becomes the Ugandan stock with the largest market capitalisation on the USE. We are very encouraged to have helped facilitate the broadest possible shareholder base in Uganda, with regional participation and in so doing, further developing the equity capital markets in this country.
The company’s commitment to shareholder returns is evident in its dividend policy, aiming to distribute at least 60% of profits. In 2024, dividends increased by 22.8% to UGX 22.1 per share, reflecting the company’s profitability and investor confidence .
By reducing its stake in MTN Uganda, MTN Group not only complied with local regulatory requirements but also unlocked significant capital. The successful share sales, combined with MTN Uganda’s strong financial performance, have enhanced the group’s financial position, enabling further investments and strategic initiatives across its operations.
Sylvia Mulinge, MTN Uganda CEO, said: “Our substantial growth in profit and service revenue highlights MTN Uganda’s role as a leader in Uganda’s digital transformation journey. By focusing on our data and fintech verticals and investing in network quality, we have managed to expand access to digital and financial services for millions of Ugandans, while also enhancing profitability.”
“The offer was 2.3 times subscribed at the offer price of Shs170 per share, demonstrating the support of our valued stakeholders. We are grateful for the opportunity to create further shared value, partnering with our local shareholders to deepen the Uganda capital markets.”
This approach underscores MTN Group’s ability to navigate regulatory landscapes while capitalizing on market opportunities to drive growth and shareholder value.