MTN Ghana profit slowdown in quarter one
Selorm Adadevoh, CEO, MTN

MTN Ghana profit slowdown in quarter one

Profit of the biggest mobile network operator (MNO) in the country, MTN Ghana slowed down in the first quarter of the year.

The company’s profit went up marginally by 5.4 per cent in the period under review from GH₵‎707.5 million as at the end of March 2022 to GH₵‎745.4 million.

With this development, it is not clear whether the commencement of the implementation of the government’s new tax regime will place extra financial burden on big businesses such MTN to further impact negatively on its profits in the second quarter and beyond.

The Excise Duty (Amendment); Income Tax (Amendment): and the Growth and Sustainability (Amendment) Acts, kicked-in early April, and it is meant to shore up domestic revenue.

The new tax regime is expected to generate additional GHC4 billion but analysts say it threatens the competitiveness of local businesses, a reason, 12 business associations have raised serious eyebrows over the development.

Other figures

Total revenue of MTN as reported in its first quarter financials posted by the Ghana Stock Exchange (GSE), went up to GH₵‎2.9 billion from the previous year’s figure of GH₵‎2.4 billion, representing 23.2 per cent rise.

The company’s service revenue also went up significantly by 23.2 per cent in the same period from GH₵‎2.3 billion to GH₵‎2.89 billion.

Its capital expenditure (capex) rose sharply by 330.3 per cent from GH₵‎277.2 million as at the end of March 2022 to a whopping GH₵‎1.1 billion, this year.

MTN’s Earnings Before Interest, Depreciation, Taxes and Amortization (EBIDTA), a useful measure only for large companies with significant assets, and/or for companies with a significant amount of debt financing,  also rose from GH₵‎1.4 billion in quarter one of 2022 to GH₵‎1.6 billion this year, representing a 16.4 per cent rise.

However, the company’s EBITDA margin decreased by 3.2 percentage points (pp) to 56.3 per cent during the period.


In providing context to the company’s performance, Chief Executive Officer of MTN Ghana, Selorm Adadevor, explained that the first quarter of the year saw elevated inflation and currency depreciation levels as observed in 2022, although the company still note signs of these trends starting to abate.

He said inflation in the month of March 2023 eased to 45.0 per cent, following a peak of 54.1 per cent in December 2022 adding that “Average inflation for quarter one (Q1) of 2023 was 50.5 per cent, up from an average of 48.3 per cent in Q4 2022.

The Ghana Cedi depreciated by 28.4 per cent against the US dollar in the first three months of 2023, but gained some value in early April of 2023.

The cost of fuel, which is a key driver of inflation, also subsided to an average of GH₵‎13.5 per liter in March 2023, from an average of GH₵‎14.1 per liter recorded in December 2022.

Mr Adadevor also noted that government sought to improve its revenue mobilisation efforts through an increase in VAT of 2.5 per cent effective January 1, this year; the removal of discounts on benchmark values on imports and the introduction of a 5.0 per cent Growth and Sustainability levy, which replaces the National Fiscal Stabilisation levy and expands the scope of companies, among other measures in a bid to improve the fiscal deficit.

He referenced the government’s Domestic Debt Exchange Programme (DDEP) as

part of its efforts to restore debt sustainability as it tries to rein in fiscal imbalances saying; “The DDEP has implications on the disposable income of individuals and the financial stability of the banking sector, with potential implications on our business.”

Commercial strategies

However, he said in spite of the challenges in the business environment, MTN Ghana executed its commercial strategies, explored cost mitigating programmes to cushion the business against the high inflationary pressures and to unlock value for its stakeholders.

Ambition 2025

On the company’s quest to create shared value, a commitment to social and economic development, the MTN CEO said; “At the heart of our Ambition 2025 strategy is the objective to lead in the delivery of digital solutions for Ghana’s progress.

To advance this cause, MTN Ghana has cut the sod for the construction of an ICT Hub as part of the “Ghana Innovation Hub” project.”

Tax compliance

In Q1 2023, MTN Ghana contributed GH₵‎1.1 billion in direct and indirect taxes, as well as GH₵‎76.8 million in fees, levies and other payments to governmental agencies.

Combined, these represent 40.3 per cent of MTN Ghana’s total revenue for the period.

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