MTN’s business in Rwanda is confident that it will be able to eke out growth against a tough economic environment in 2024.
“The macroeconomic outlook for Rwanda in 2024 is expected to remain challenging due to continued currency depreciation risks, which is expected to continue to put pressure on the cost of living for Rwandans and the cost of doing business in the short term” the company said after releasing its earnings report for the full-year to December 2023.
According to the National Bank of Rwanda, Rwanda’s GDP growth is expected to “remain resilient in 2024, boosted by the acceleration of the post-flood disaster reconstruction spending and recovery in the agricultural sector.” Though inflation moderated in the second half of 2023, indications of renewed upward pressure in 2024 have been observed, in part due to exchange rate pressures arising from a higher import bill.
In recent weeks, Africa’s largest mobile group highlighted that weaker currencies, higher inflation, increased costs and consumers who are more stretched, particularly in its three largest markets — Nigeria, SA and Ghana — are weighing heavily on earnings.
Of these, Nigeria’s economy was the biggest drag on the group’s financial performance for the past year.
In Rwanda, a similar situation is being painted but the mobile operator has kept its guidance unchanged.
“As we continue to execute our strategy and commercial initiatives, focus on efficiencies and leverage our 4G network, we maintain our medium-term guidance of mid-teens service revenue growth and a stable ebitda [earnings before interest, tax, depreciation and amortisation] margin,” said MTN Rwanda CEO Mapula Bodibe said.
MTN Rwanda, also known as MTN Rwandacell, is the largest mobile operator in the East African country with a population of about 13-million. It listed on the Rwanda Stock Exchange in May 2021.
The company reported that service revenue rose 11.2% to Rwf246.5bn, or about R3.63bn, for the period. After-tax profit dropped 28.9% to Rwf11.4bn due to high finance costs related to inflation adjustments on its tower leases and currency depreciation affecting the company’s foreign obligations.
Active data subscribers rose 14.3% year on year to 2.6-million, helping to push up ebitda 6.8% to Rwf115.8bn.
Total subscriber numbers rose 6.5% year on year to 7.3-million while active data subscribers increased 14.3% to 2.6-million
Mobile money customers increased 13.9% to 4.9-million, with the company noting that the trajectory of advanced mobile money services — payments, remittance, savings and lending — was especially strong, up 69.2%.
Fintech contribution to overall service revenue increased to 39.1% from 33.4% in 2022.
Capital expenditure, excluding leases, rose 32% to Rwf62.2bn.
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