MTN Uganda Limited

Interim financial results for the

six months ended 30 June 2024

Interim financial results for the six months ended 30 June 2024 |
1
MTN Uganda Limited (MTN Uganda) today announces its interim financial results for the six
months ended 30 June 2024.

Kampala, Uganda | Monday, 5 August 2024

Salient features:
Active data users
Mobile subscribers Active fintech Service revenue
grew by users grew by
grew by grew by

14.6%
to 20.7 million
26.8%
to 8.8 million
14.5%
to 12.5 million
20.4%
to Ush 1,505.4 billion

Data revenue Fintech revenue

Voice revenue Earnings before interest,
grew by grew by
grew by tax, depreciation, and
amortization grew by

15.1% 28.6% 23.5% 22.4%

to Ush 626.7 billion to Ush 373.3 billion to Ush 442.3 billion to Ush 784.7 billion

Capital expenditure, EBITDA margin Profit after tax

excluding right of use improved by (PAT) increased by
assets increased by
0.9 percentage

8.6%
points (pp) to
29.7%
to Ush 219.1 billion 51.5% to Ush 295.7 billion

First interim dividend proposed for 2024 is

Ush 6.6 per share

(Ush 147.8 billion)

Payment date for the first interim dividend is

20th September 2024

Book Closure: 2nd September 2024

*Unless otherwise stated, financial and non-financial growth rates are presented on a year-on-
year basis (YoY, 6M to 30 June 2024 versus 6M to 30 June 2023 and 6M to 30 June 2024 versus 6M
to 30 June 2023).

Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access
data and excludes roaming and wholesale. Fintech includes MoMo and airtime advance. Active
mobile users are a count of all subscribers at a point in time which had a revenue generating event
in the last 90 days prior to that point in time. Active data users are a count of subscribers who
during the past 30 days had data usage greater than or equal to 5 megabytes. Active fintech users
is a count of subscribers who have transacted on the platform in the past 30 days.

2 | Interim financial results for the six months ended 30 June 2024
 MTN Uganda’s
Chief Executive
Officer (CEO)
Message

Sylvia Mulinge

Service revenue grew strongly by 20.4%

driven by resilience in both the connectivity
and fintech businesses, underpinned by our
growing loyal base of 20.7 million customers
(up 14.6% YoY). Our extensive network
investment and improved customer value
proposition enhanced customer experience,
MTN Uganda’s performance in the culminating in growth of our subscriber base
first half of the year continued on and reduced churn.
a positive trend, supported by the
overall momentum in economic MTN Uganda achieved first place in the latest
growth. The Ugandan economy net promoter score (NPS) assessment for Q2
grew by 6.0% for the 2023/24 2024, conducted by an independent third-
financial year with macro-economic party testing organisation. This achievement
indicators trending favourably in marks our lead for 14 consecutive quarters
the six-month period. and attests to our continued customer
satisfaction efforts.

To enhance the quality, capacity, and

resilience of our network, we invested
Headline inflation moderated with an average
Ush 219.1 billion focused on 4G and 5G. Our
of 3.4% (H1 23: 8.0%) underpinned by lower
4G LTE population coverage increased to
food inflation and improved exchange rate
87.8%, up 4.4pp while our 5G roll-out extended
stability. The Uganda shilling appreciated by
to 538 strategic sites with full coverage of the
2.0% against the US dollar in H1 24, driven
capital, Kampala. Our 2G and 3G population
by recovery of trade receipts and continued
coverage also rose to 98.9% (+0.5pp) and
monetary policy support. Against this
93.2% (+0.8pp) respectively as we extended
backdrop, our strong commercial execution
connectivity across the country to ensure
enabled us to deliver a pleasing set of results.

Interim financial results for the six months ended 30 June 2024 |
1
that all Ugandans enjoy the benefits of a The offer which recorded a 2.3x
modern connected life. subscription, aligned with MTN’s objective
to broaden Ugandan shareholding in the
In fintech, our investment in H1 was geared Company and provided an opportunity to
towards advancing the ecosystem with a Ugandan retail and professional investors,
focus on creating a deeper appreciation of including our loyal customers, to own a
our advanced services and expansion of stake in the Company and participate in
our core services. During Q1, we addressed its future growth. The successful offer
our customers credit requirements by expanded our shareholder base to 20,636
establishing a comprehensive loan shareholders with remarkable participation
suite Wesotinge in partnership with five from local pension funds representing over
financial institutions to meet both short- two million indirect beneficiaries.
and long-term liquidity requirements. In
Q2, we focused on improving the financial We are proud to have been the sole
flexibility of merchants and agents to telecom partner in the first digital national
ramp up cashless transaction usage. We population and household census held
introduced a short-term credit facility in May 2024. The census recorded a total
Merchant XtraStock and increased the of 45.9 million people with 50% below the
number of cashpoints for agent top ups age of 18. We are proud to have supported
to reduce the float gaps in the market. The the government in this project which
improved liquidity in the trade helped to enabled timely collection, processing and
drive a 25.2% YoY expansion in transactions dissemination of results.
volumes to 2.0 billion.
In the spirit of creating shared value in our
communities, in June our staff participated
in 30 days of Y’ello Care in support of
education forrural and remote communities.
The implemented projects have supported
over 4,450 direct beneficiaries who
received revamped computer laboratories
for digital literacy, clean water facilities,
student accommodation rehabilitation and
Notably, during the quarter skills training on sustainable agricultural
ended 30 June 2024, MTN and healthcare practices.
Uganda Limited fulfilled its
20% listing obligation on the We are encouraged by the increasing
Uganda Securities Exchange, demand for our services as we continually
following the secondary position MTN as the brand of choice for our
sale offer of approximately customers. We believe that the business
1.6bn ordinary shares in the is well positioned to continue unlocking
Company. growth and our operating model remains
agile to ensure margin resilience.

We thank all our stakeholders including

our regulators and staff for the support in
achieving this success and commit to meet
our medium-term guidance targets in line
with the Ambition 2025 strategy.

2 | Interim financial results for the six months ended 30 June 2024
Key financial highlights
Ush mllions H1 2024 H1 2023 YoY Q2 2024 Q2 2023 YoY

Total revenue 1,522,676 1,267,089 20.2% 772,184 639,161 20.8%

Non-service revenue 17,278 17,030 1.5% 8,155 10,213 -20.2%
Service revenue 1,505,398 1,250,059 20.4% 764,029 628,948 21.5%
Voice 626,731 544,659 15.5% 311,313 271,669 14.6%
Data 373,273 290,239 28.6% 195,415 144,970 34.8%
Fintech 442,301 358,282 23.5% 226,337 183,443 23.4%
Mobile money 430,787 342,833 25.7% 221,113 176,028 25.6%
Xtratime 11,514 15,449 -25.5% 5,224 7,415 -29.6%
Other service revenue 63,093 56,879 10.9% 30,963 28,866 7.3%
Other income 253 55 360.8% 253 - -
Expenses 738,253 626,117 17.9% 378,168 324,545 16.5%
EBITDA 784,676 641,027 22.4% 394,269 314,616 25.3%
EBITDA margin 51.5% 50.6% 0.9 pp 51.1% 49.2% 1.8 pp

Depreciation and Amortization 239,118 211,174 13.2% 121,301 106,262 14.2%

EBIT 545,558 429,853 26.9% 272,968 208,354 31.0%
EBIT margin 35.8% 33.9% 1.9 pp 35.4% 32.6% 2.8 pp

Net finance costs 121,042 104,212 16.2% 64,341 51,502 24.9%

Profit before tax (PBT) 424,516 325,641 30.4% 208,627 156,852 33.0%
Taxation 128,776 97,606 31.9% 62,914 49,463 27.2%
Profit after tax (PAT) 295,740 228,035 29.7% 145,713 107,389 35.7%
Earnings per share 13.2 10.2 29.7% 6.5 4.8 35.5%
PAT margin 19.4% 18.0% 1.4 pp 18.9% 16.8% 2.1 pp
Capex (IFRS 16) 364,399 289,119 26.0% 210,475 160,136 31.4%
Capex (excluding leases) 219,071 201,743 8.6% 98,692 108,965 -9.4%
Capex intensity 14.4% 15.9% -1.5 pp 12.8% 17.0% -4.3 pp

Non-financials (millions)

Mobile subscribers 20.7 18.1 14.6%

Data subscribers 8.8 6.9 26.8%
Fintech subscribers 12.5 10.9 14.5%

Note:

• Year-on-year movements have been computed based on balances before rounding

• Voice revenue includes interconnect and outbound roaming voice.
• Data revenue includes outbound roaming, fixed and mobile data.
• Digital revenue excludes bulk SMS and USSD services.
• Fintech revenue includes MTN Xtratime and mobile financial services.
• CAPEX (IAS 17) excludes right of use assets.
• Other service revenue includes inbound roaming data, SMS, USSD, Information and Communications Technology
(ICT) & infrastructure and device.

Interim financial results for the six months ended 30 June 2024 |
3
Operational Review
Strong half-year performance, solid recovery in data and fintech growth.

Voice revenue grew by 15.1% YoY driven increased our fiber network by 54.2% YoY
by a sustained aggressive customer to 12,102 km.
acquisition strategy coupled with a
refreshed country-wide voice campaign Data revenue contribution to service
in the period. Our improved all-network revenue increased to 24.8% (H1 23: 23.2%).
bundle packages have been well received
as we continually address value and Fintech revenue registered a 23.5% YoY
affordability proposition. We have also growth with a strong performance in our
strategically invested in increasing our mobile money business which grew by
service touch points and network sites 25.7% (H1 23: 19.8%). Our solid revenue
particularly in the upcountry regions. performance was driven by increased
These efforts have resulted in a 2.6 million activity, with transaction volume up by
growth in our base during the period. 25.2% to 2.0 billion and transaction value
up by 12.6% to Ush 69.4 trillion. The growth
The contribution of voice revenue to service in transaction volume has been bolstered
revenue declined by 1.6pp to 41.6% (H1 23: by higher merchant payments and P2P
43.6%) owing to continued improvement of activity while our advanced revenues
our data and fintech segments. continue to benefit from the success of
the Wesotinge loan campaign which has
Data revenue accelerated by 28.6% strengthened our Banktech revenue line.
boosted by a 26.8% growth in active data Advanced revenue contribution increased
users to 8.8 million. Our two-pronged to 28.2% (H123: 26.3%). Our merchants
strategy of deepening smartphone increased by 43.1% to 382k and agents by
penetration through device financing 24.9% to 202k
and strategic partnerships with device
manufacturers has yielded a 5.9pp growth Fintech revenue contribution to service
to 41.6%. We have continued to improve revenues also increased to 29.4% (H1 23:
our data value proposition which has 28.7%).
reduced churn and increased usage. Our
average subscriber data consumption (MB Digital revenue grew by 26.0% driven by
per active subscriber) improved by 19.9% of our content value added services as
while total data traffic increased by 51.9% we continually invest in our platforms to
with 4G traffic accounting for over two- address the entertainment needs of our
thirds of total data volume. customers. Our super app ayoba registered
a 34.6% YoY increase in subscribers to 1.9
In Q2, our data revenue performance grew million users in the period.
strongly by 34.8% YoY as our customers
continue to enjoy faster through-puts EBITDA grew by 22.4% YoY driven by
and better connectivity as a result of the strong revenue growth and operational
increased 4G LTE investment. efficiency in part supported by relatively
low inflation and exchange rate stability.
Our home broadband strategy unfolded This performance enabled us to deliver a
positively with a 130% growth in active margin of 51.5%, a 0.9pp improvement YoY.
subscribers amidst a highly competitive
market. In the quarter, we introduced In Q2, we recorded faster growth in EBITDA
4G and 5G speed-based fixed wireless at 25.3% secured by lower inflation in Q2 of
packages to boost our proposition and 3.6% versus 6.4% in the same period last
year.

4 | Interim financial results for the six months ended 30 June 2024
Depreciation and amortization rose by Leveraging on our network investment, we
13.2% YoY driven by the higher network commit to deliver reliable and affordable
investments which impacted our lease voice and data services to empower
costs. our loyal customer base. To sustain our
commercial momentum in the second half,
Finance costs grew strongly particularly in we will continue to partner, innovate and
Q2 in light of increased interest expense on solution to meet an ever-evolving market
lease liabilities as a result of accelerated as technology advances. Our investments
investment in the period. Our net debt to particularly in 5G and 4G LTE should
EBITDA is currently at 0.1x in compliance augment our customers’ user experience
with our financial covenants and all our and reinforce the momentum we have
debt is fully localized as we manage achieved.
exchange rate risk.
In fintech, we continue to focus on further
Profit after tax increased by 29.7% to Ush enhancement of the liquidity requirements
295.7 billion, with an uplift in PAT margin of in the trade for our merchants and agents.
1.4pp to 19.4%. We are also monitoring the impact on our
basic revenues following a directive from
Capex (excluding leases) increased by 8.6% Bank of Uganda in Q2 on mandatory
YoY as we densified our network footprint verification of customers conducting
across the country. With our investments mobile money transactions involving sums
paying off with increased revenues, our above Ush 1 million on both withdrawals
capex intensity reduced by 1.5 pp to 14.4% and deposits. We are engaging our large
in line with our medium-term target. value customer base through CVM and
product innovation to protect our portfolio.

Outlook As we maximize our shareholder returns

and enhance our financial resilience, we will
The Ugandan economy is projected by continue to monitor our cost efficiencies
the Bank of Uganda to continue a growth through our expense efficiency program
trend of 6.0-6.5% in the medium term and optimise our capital investments for
with inflation in H2 24 expected to pick the remaining part of the year.
up moderately between 5.0-5.4% driven
by increased consumer demand. We are With this, we maintain our medium-term
cognizant of the downside risks to this guidance framework of delivering mid-teen
outlook arising from potential global service revenue growth, stable EBITDA
energy hikes and unfavorable weather margins above 50% and maintaining capex
conditions, which could impact food supply. (excluding leases) intensity at mid-teen
Additionally, persistent global inflation and levels as we support our growth prospects.
higher interest rates could create volatility
in the exchange rate.

As we look ahead, we are committed to

delivering on our strategy while actively
monitoring developments in our operating
environment to ensure financial resilience
and value creation for all our stakeholders.

Interim financial results for the six months ended 30 June 2024 |
5
Final dividend recommendation

Notice is hereby given that the Company’s directors have proposed the payment of the first
dividend of Ush 6.6 per share (Ush 147,767,692,977) for the six months ended 30 June 2024.
This is subject to deduction of withholding taxes. The number of ordinary shares in issue at
the date of this declaration is 22,389,044,239.

In compliance with the requirements of USE Listing Rules 2021, the salient dates relating to
the payment of the dividend are as follows:

Book Closure Date Monday, 2 September 2024

Dividend Payment Date Friday, 20 September 2024

In line with the Uganda Securities Exchange (USE) Trading Rules 2021, the ex-dividend date
will be Wednesday, 28 August 2024. Accordingly, an investor who buys MTN Uganda shares
on or before this date will be entitled to the final dividend. Any investor buying MTN Uganda
shares after Wednesday, 28 August 2024 will not be entitled to the final dividend declared
for the period.

The dividend will be transferred electronically to the bank accounts or mobile money wallets.

Directors statement
The below interim financial statements for the period ended 30 June 2024 were reviewed by
Ernst & Young, Certified Public Accountants.

The financial statements were approved by the Board of Directors on Thursday, 1 August 2024
and signed on their behalf by:

Sylvia Mulinge Andrew Bugembe

Chief Executive Officer/ Chief Finance Officer/
Executive Director Executive Director

6 | Interim financial results for the six months ended 30 June 2024
Interim condensed consolidated financial statements for
the period ended 30 June 2024
Consolidated Statement of Comprehensive Income

June 2024 June 2023

Reviewed Reviewed
Shs ‘000 Shs ‘000
Revenue from contracts with customers 1,522,675,972 1,267,089,363
Other income 253,257 54,959
Direct network operating costs (175,660,204) (166,956,810)
Government and regulatory costs (37,582,789) (29,743,359)
Cost of handsets and other accessories sold (16,896,646) (18,636,329)
Interconnect and roaming (78,555,047) (28,031,000)
Employee benefits (73,216,879) (63,729,159)
Selling, distribution and marketing expenses (257,660,477) (222,270,275)
Increase in impairment of trade receivables (4,458,449) (1,096,702)
Other operating expenses (94,222,112) (95,653,695)
Depreciation and impairment of property, plant, and equipment (194,719,170) (178,416,615)
Amortisation of intangible assets (44,398,995) (32,757,677)
Operating profit 545,558,461 429,852,701
Finance income 26,464,254 27,331,065
Finance costs (145,561,232) (130,053,195)
Net foreign exchange losses (1,945,228) (1,489,409)

Profit before tax 424,516,255 325,641,162

Income tax expense (128,776,625) (97,606,038)
Profit for the period 295,739,630 228,035,124
Other comprehensive income for the year net of tax - -
Total comprehensive income for the period 295,739,630 228,035,124
Basic/ diluted earnings per share 13.2 10.2

Interim financial results for the six months ended 30 June 2024 |
7
Consolidated Statement of Financial Position
June 2024 June 2023 Dec 2023
Reviewed Reviewed Audited
Shs ‘000 Shs ‘000 Shs ‘000
Assets
Non-current assets
Property, plant and equipment 1,200,858,421 1,031,959,769 1,086,547,617
Right-of-use assets 1,183,323,732 1,030,095,262 1,091,713,853
Intangible assets 393,057,967 347,346,388 429,636,764
Deferred tax assets 29,239,049 22,085,688 21,609,312
Contract assets 31,461,934 15,582,044 23,424,082
Receivables and prepayments 62,149,508 68,517,997 66,552,945
2,900,090,611 2,515,587,148 2,719,484,573
Current assets
Inventories 19,276,561 27,603,528 12,745,207
Income tax recoverable 80,993,937 1,391,295 1,976,045
Contract assets 27,481,308 14,695,399 21,716,960
Trade and other receivables 228,508,837 190,481,891 187,243,059
Current Investments 11,916,040 11,000,000 12,265,000
Mobile money deposits 1,349,173,557 1,253,979,015 1,488,546,693
Cash and cash equivalents 98,339,362 145,197,937 238,562,937
1,815,689,602 1,644,349,065 1,963,055,901
Total Assets 4,715,780,213 4,159,936,213 4,682,540,474
Equity
Ordinary share capital 22,389,044 22,389,044 22,389,044
Retained earnings 1,144,279,602 986,503,889 991,829,855
1,166,668,646 1,008,892,933 1,014,218,899
Liabilities
Non-current liabilities
Borrowings - 52,618,196 17,651,546
Lease liabilities 1,194,376,627 1,041,297,949 1,107,020,973
Other financial liability 83,906,106 - 97,446,644
Deferred revenue- IRU assets 14,081,965 11,761,998 12,395,428
Employee share-based payment liability 11,329,154 11,401,422 10,135,073
1,303,693,852 1,117,079,565 1,244,649,664
Current liabilities
Trade and other payables 416,421,906 446,517,239 510,052,772
Contract liabilities 43,595,418 15,457,454 31,960,239
Income tax payable - 718,845 2,534,440
Bank overdraft 53,257,299 - -
Borrowings 165,091,933 165,223,638 184,736,253
Lease liabilities 174,055,630 130,720,273 149,728,208
Other financial liability 19,780,394 - 24,192,394
Mobile money deposits 1,349,173,557 1,253,979,015 1,488,546,693
Employee share-based payment liability 4,930,720 4,424,335 4,629,720
Provisions 19,110,858 16,922,916 27,291,192
2,245,417,715 2,033,963,715 2,423,671,911
Total liabilities 3,549,111,567 3,151,043,280 3,668,321,575
Total equity and liabilities 4,715,780,213 4,159,936,213 4,682,540,474

8 | Interim financial results for the six months ended 30 June 2024
Consolidated Statement of Changes in Equity
Ordinary Retained
Total Equity
Share Capital Earnings

Shs ’000 Shs ’000 Shs ’000

For the six months ended 30 June 2023

As at 1 January 2023 22,389,044 881,608,509 903,997,553
Comprehensive income:
Profit for the period - 228,035,124 228,035,124
Total comprehensive income for the period - 228,035,124 228,035,124
Transactions with owners:
Dividends paid - (123,139,744) (123,139,744)
As at 30 June 2023 (Reviewed) 22,389,044 986,503,889 1,008,892,933

For the year ended 31 December 2023

As at 1 January 2023 22,389,044 881,608,509 903,997,553

Comprehensive income:
Profit for the period - 493,076,776 493,076,776
Other comprehensive income - - -
Total comprehensive income for the period - 493,076,776 493,076,776
Transactions with owners:
Dividends paid - (382,855,430) (382,855,430)
As at 31 December 2023 (Audited) 22,389,044 991,829,855 1,014,218,899

For the six months ended 30 June 2024

As at 1 January 2024 22,389,044 991,829,855 1,014,218,899
Comprehensive income
Profit for the period - 295,739,630 295,739,630
Total comprehensive income for the period - 295,739,630 295,739,630

Transactions with owners:

Dividends paid - (143,289,883) (143,289,883)
As at 30 June 2024 (Reviewd) 22,389,044 1,144,279,602 1,166,668,646

Interim financial results for the six months ended 30 June 2024 |
9
Consolidated Statement of Cash Flows
June 2024 June 2023
Reviewed Reviewed
Shs’000 Shs’000
Operating activities
Cash generated from operations 634,561,646 534,040,421
Interest received 26,813,214 5,989,179
Interest paid on mobile money deposits (21,161,097) -
Interest paid on borrowings (13,476,561) (17,980,641)
Interest paid on lease liabilities (107,688,023) (90,423,215)
Interest on financial liability (4,567,232) -
Dividends paid (143,289,883) (123,139,744)
Income tax paid (217,958,694) (109,642,785)
Net cash generated from operating activities 153,233,370 198,843,215

Cash flow from investing activities

Payments for property plant and equipment and IRU assets (206,748,942) (139,920,596)
Proceeds from disposal of property plant and equipment 231,418 172,937
Purchase of intangible assets (6,779,967) (21,231,651)
Net cash used in investing activities (213,297,491) (160,979,310)

Financing activities
Repayments of borrowings (90,459,634) (66,709,634)
Proceeds from borrowings 55,000,000 35,000,000
Payment of principal portion of lease liability (77,976,735) (60,410,275)
Payment of financial liability (17,926,725) -
Net cash used in financing activities (131,363,094) (92,119,909)

Net decrease in cash at bank and in hand (191,427,215) (54,256,004)

Movement in cash at bank and in hand

At start of period 238,562,937 200,772,719
Decrease (191,427,215) (54,256,004)
Exchange losses on cash at bank and in hand (2,053,659) (1,318,778)
Cash and Cash equivalents at the end of the period 45,082,063 145,197,937

10 | Interim financial results for the six months ended 30 June 2024
Amanda Bbosa Rabwoni Emasu Oscar Paul
Senior Manager, Investor Relations Manager, Investor Relations
MTN Uganda Limited MTN Uganda Limited
Telephone: +256 772 123 195 Telephone: +256 772 123 602
Email: [email protected] Email: [email protected]

About MTN Uganda

MTN Uganda is one of Africa’s largest providers of communications services, connecting approximately
20.7 million people in communities across the country with each other and the world. Guided by a vision
to lead the delivery of a bold new digital world, MTN Uganda’s leadership position in coverage, capacity
and innovation has remained constant since its launch in 1998. MTN Uganda is part of the MTN Group –
a multinational telecommunications group, which operates in 19 countries in Africa and the Middle East.

Interim financial results for the six months ended 30 June 2024 |
11