MTN defies 2022 turbulence — Profit margins
• Selorm Adadevoh — CEO, MTN Ghana

MTN defies 2022 turbulence - Profit margins up despite headwinds

MTN Ghana’s financial performance results for 2022 suggest that the company has developed the ability to defy gravity.


In a year when macroeconomic headwinds gathered strength over Ghana’s economy, sending business costs through the roof and dragging effective consumer demand through the floor, MTN still delivered a 28 per cent increase in service revenue to GH¢9.9 billion and an even stronger 30.9 per cent increase in Earnings Before Interest, Tax Depreciation and Amortisation (EBITDA).

This has enabled pre-tax profits to climb to GH¢4.087 billion, up from GH¢2, 849 billion in the previous year. Similarly profit after tax rose from GH¢2.001 billion in 2021 to GH¢2,856 billion last year.

MTN 2022 turbulence

The company’s shareholders will be enthused; at a time that long-term high interest rates have dulled demand for equities, thereby stifling capital gains on shareholdings, MTN Ghana continues to deliver dividends that rank among the most competitive on the Ghana Stock Exchange.

Beyond the company’s sustained extraordinary profitability, it also offers a very generous dividend payout policy.

For 2022, the Board of Directors have proposed to pay out 70.6 per cent of its profit after tax as dividends and this translates to a final dividend per share of 16.4 pesewas per share, up 42.65 per cent over the dividend per share paid in 2021.

Sheer prudence

But just as important is the sheer prudence with which the company is managed as a growing corporate entity. Crucially, the company gets most of its revenues on cash basis – indeed most of it comes from pre-payments by customers – and added to the sheer immensity of its business volumes, which makes it a cash cow.

Consequently, while the sharp rise in financing costs resulting from long-term record high interest rates and the effect of sharp cedi depreciation led to a 6.9 per cent increase in finance costs – the extent of this rise curbed by efficient management of liabilities - finance income grew by 161.3 per cent on gains from the investment of surplus cash in call and fixed term deposits.

The net result was a 26.5 per cent year-on-year decline in net financing cost which was pivotal in achieving a 42 75 increase in after tax profit.

But most crucial of all is MTN Ghana’s huge profit margins, the result of heavy capital investments in infrastructure. 

This is supported by exemplary prudence in operating cost control. Indeed, it is instructive that the growth in total costs of 25.35 in 2022 was significantly lower than the average monthly inflation rate of 31.5 per cent. This supported growth in EBITDA of 30.9 per cent in 2022.

In effect therefore, more than half of MTN Ghana’s revenues translate into profit before the deduction of interest costs, taxation, depreciation and debt amortisation.

Those revenues are well diversified and so is their growth, which means that the company’s profitability and growth in profits looks to be secure going forward.

This is because of the underlying strength of MTN’s business which continues to attract more and more customers by the year, most of whom are willing to spend more on its products and services by the year as well. 

Total revenue earned by MTN Ghana in 2022 amounted to a little over GH¢9.916 billion, up 28.4 per cent over the GH¢7.723 billion generated in the previous year.

Most of this was in the form of service revenue which grew by 28.3 per cent in 2022 to reach GH¢9.880 billion, - up from GH¢7.701 billion in 2021 - supported by good subscriber management amid the national subscriber re-registration programme, increased investment in the network and the diligent execution of commercial initiatives in voice, data and Mobile Money services.

Last year, the company added 3.3 million more subscribers to its customer base, which consequently increased by 12.8 per cent to reach 28.6 million. This was achieved on the back of GH¢2.1 billion in capital expenditure made by the company to ensure that the entire subscriber base enjoyed an excellent service experience, thereby enticing them to use more services and thus spend more money. This was a quantum leap in capital expenditure of 44.4 per cent, which was GH¢1.485 billion in 2021.

Consequently, voice revenue grew by 24.5 per cent to GH¢3.3 billion. However, even this translated to a marginal decline in the contribution of voice revenue to overall service revenue as the other sources of revenue grew even faster; the contribution of voice revenue fell to 33.1 per cent from 34.15 per cent as of the end of 2021.

Data revenue grew fastest, by 39.8 per cent to GH¢3.9 billion, driven by an 8.3 per cent increase in the number of data users to 13.5 million and a 46.65 increase in data traffic. Consequently the contribution of data revenue to overall service revenue increased from 36.05 in 2021 to 39.2 per cent last year.

MoMo and e-levy

Even though MoMo revenues suffered from the implementation of the controversial e-levy in 2022, MTN’s expansion of its MoMo ecosystem – by growing active MoMo merchants by 4.8 per cent and agents by 17.2 per cent - and the launch of a MoMo business app and continued expansion of advanced service offerings  (such as retail merchants payments, micro-loans, micro-insurance and international remittances) combined to increase active MoMo users by 15.0 per cent to 12.7 million, which in turn drove an 11.6 per cent growth in MoMo revenue to GH¢1.9 billion, although its contribution to overall service revenue still declined from 22.5 per cent to 19.6 per cent.


However, digital revenue declined by 18.8 per cent to GH¢144 million due to a 15.9 per cent decrease in the number of active subscribers as the company sought to rationalise its service portfolio. Consequently the contribution of digital service revenue to total service revenue declined from 2.3 per cent to 1.5 per cent. 

Financing cost

With financing costs expected to remain high through 2023, MTN Ghana is in customary fashion, thinking outside of the box. While determined to continue offering shareholders generous dividend payouts, it also realises the growing need to use internally generated cash flow to finance its expansion. 

Consequently the company is considering – subject to its obtaining the relevant regulatory approvals – offering shareholders the choice of cash or extra shares as the form of dividend payment for the 2022 financial year. 

This would allow shareholders who want liquidity to have it, but would at the same time enable it to reinvest capital that would otherwise have been used as cash dividend pay outs to shareholders willing to reinvest their dividend income.


This is yet another illustration of how MTN Ghana uses innovation to stay ahead of the market and stay at the top of its industry to the benefit of all its various stakeholder segments. Not just innovation in the use of technology to design and deliver products and services; but also in the financial strategies and models it deploys.

Expect its shareholders to embrace such innovative offerings with the same enthusiasm that its subscribers embrace its products and service offerings.

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