MTN Rwanda dipped into the red in the 2024 financial year as revenue came under pressure and operating costs rose.
The company reported a loss after tax of 5.5-billion Rwandan francs for the year to end-December, while earnings before interest, tax, depreciation and amortisation (ebitda) decreased by 19.8% to 92.9-billion Rwandan francs.
The company reported an ebitda margin of 35.5%, down 10.9 percentage points due to the effect of the regulatory and macroeconomic environment and the continued depreciation of the local currency against the dollar, which affected its foreign-denominated costs.
MTN Rwanda said on Friday it grew its subscriber base by 5.1% to 7.6-million.
Though active data subscribers decreased by 8% to 2.4-million owing to competitive pressures, its active MoMo user base expanded by 8% to 5.3-million, deepening the company’s mobile money penetration.
Total revenue was up 4.9% at 261.6-billion Rwandan francs, with service revenue growing 4.6%. Voice revenue declined 17.8%, data revenue grew 0.2% and MoMo revenue was 30.3% higher.
Though the business reported a full-year loss, it achieved a significant turnaround in the fourth quarter, generating a profit after tax of 5.3-billion Rwandan francs. This was driven by robust growth in service revenue, reflecting ongoing efforts to strengthen the company's operations and enhance efficiency.
CEO Mapula Bodibe said the business was affected by the continued zero-rating of local mobile termination rates (MTR) and rising One Network Area (ONA) interconnect charges attributed to permanent roamers in Uganda and South Sudan. However, she said the company was pleased with the progress and initial outcomes of its engagements with the Rwanda Utilities Regulatory Authority (Rura) to find constructive solutions to address these matters.
Discussions were continuing with stakeholders towards the re-introduction of MTRs for the industry, she said.
With regard to the effect of zero-rated MTRs on interconnect traffic costs within the ONA countries, a decision was made by the regulator in September 2024 that the zero-rated MTRs would only apply to local calls, while calls to roaming subscribers in ONA countries would be treated as international calls.
“It was further established that mobile operators will implement a cost for carrying such traffic for the originating network, at a rate to be determined between the mobile operators. This decision has resulted in an improvement in our Interconnect roaming margins in the fourth quarter,” she said.
Bodibe said mobile money would remain key to the growth of the company’s business as it deepened its financial services offerings through the adoption of advanced services and through new products and services.
Considering the prevailing developments in its operating context, it had updated its medium-term guidance to “mid-teens” service revenue growth, a stable ebitda margin in the range of 40%-42%, MTN Rwanda said.
Recent developments on the regulatory front should help to accelerate the recovery of the business, Bodibe said.
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