MTC’s Resilient Performance: Revenue Up by 5.91% Despite Regulatory Challenges

Mobile Telecommunications Limited (MTC), a leading telecommunications company in Namibia, has demonstrated resilience and adaptability amidst macroeconomic, geopolitical, and regulatory challenges. Despite these adversities, MTC reported a notable increase in revenue for the six months ended 31 March 2024. This article delves into the company’s financial performance, strategic initiatives, and future outlook, providing a comprehensive analysis for investors and stakeholders.

Financial Performance Overview

Revenue Growth and Profit Decline

MTC achieved a revenue increase of 5.91%, reaching N$1.57 billion for the period under review. This growth was driven by the rising demand for high-speed data connectivity and value-added managed services. However, profit from operations saw a decline, with the figure dropping from N$533.92 million in March 2023 to N$488.25 million in March 2024. This reduction was primarily due to increased direct and operating costs.

Table: Financial Performance Summary

MetricMarch 2024 (N$’000)March 2023 (N$’000)September 2023 (N$’000)
Revenue1,571,6091,483,9243,046,878
Total Income1,572,4321,484,9823,049,953
Profit from Operations488,254533,9181,099,709
Profit after Tax362,320387,042794,175
EBITDA Margin (%)44.6%49.5%49.5%
Earnings per Share (cents)48.3151.61105.89
Headline Earnings per Share (cents)48.3151.60105.92
Diluted Earnings per Share (cents)48.3151.61105.89
Total Dividend per Share (cents)38.8042.0088.45
NAV per Share (cents)366.00348.65356.48

Impact of Regulatory Changes

MTC faced significant financial impacts due to regulatory changes. The Supreme Court ruling on section 23 of the Communications Amendment Act mandated MTC to pay levies to the Communications Regulatory Authority of Namibia (CRAN) for the 2021, 2022, and 2023 financial years. This led to an additional N$59.7 million in arrear levies and a N$75.4 million increase in regulatory levies compared to the same period last year.

Cost Management and EBITDA

The company’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) decreased by 4.9%, from N$734 million in March 2023 to N$700 million in March 2024. This decline was due to rising direct and operating costs, including costs associated with the SIM registration project and increased personnel costs. Despite these challenges, MTC managed to achieve a total income growth of 5.89%, which partially offset the CRAN license fees.

Strategic Initiatives and Technological Investments

Enhancing System Efficiencies

MTC is focusing on enhancing system efficiencies and customer contract management. This includes significant investments in technological infrastructure to support its service offerings. The company aims to improve its core systems and processes to better serve its customer base and streamline operations.

Fiber Expansion and Network Infrastructure

MTC is expanding its network infrastructure by extending fiber connections across key regions. This strategic development is expected to improve service delivery and align with the growth potential presented by upcoming energy projects in Namibia. The fiber expansion is part of MTC’s broader strategy to enhance its technological capabilities and support future growth.

Mobile Financial Services (MFS)

MTC is preparing to launch a new mobile financial service. This initiative aims to broaden the company’s service portfolio and cater to the evolving needs of its customers. The introduction of MFS is expected to strengthen MTC’s market position and drive additional revenue streams.

Digital Ecosystem and Local Talent

MTC is committed to building a robust digital ecosystem. The company is making strategic investments to support the growth of digital services and solutions. This includes nurturing local talent and innovations that contribute to the broader digital economy. MTC’s efforts in this area reinforce its position as a leader in digital transformation.

Sim Registration Compliance

MTC has made significant progress in its SIM registration project. By 30 April 2024, the company had registered 203,348 customers out of the initial 323,236 unregistered subscribers. This achievement demonstrates MTC’s effective compliance and outreach efforts. The unregistered subscriber count now stands at 119,888, reducing the potential revenue loss from N$8.1 million to N$2.4 million per month.

Table: Sim Registration Progress

MetricInitial CountRegistered CustomersUnregistered CustomersRevenue Loss Reduction (N$’000)
Unregistered Subscribers323,236203,348119,8885,700
Registration Rate (%)94%
Potential Monthly Revenue Loss (N$)2,400

Conclusion

MTC has shown resilience and adaptability in the face of significant economic, geopolitical, and regulatory challenges. The company’s revenue growth, despite increased costs and regulatory levies, underscores its strong market position and effective strategic initiatives. With continued investments in technological infrastructure, mobile financial services, and a robust digital ecosystem, MTC is well-positioned to maintain its growth trajectory. The company’s commitment to enhancing system efficiencies, expanding fibre infrastructure, and complying with regulatory requirements will drive future success. Investors and stakeholders can remain optimistic about MTC’s ability to navigate challenges and capitalize on emerging opportunities in the telecommunications sector.