E-levy bites MTN as share price drops 18.9% in 2022 Selorm Adadevoh, CEO of MTN Ghana, talks to clients
He further stated that in addition to the levy’s expected impact on MTN’s financial performance and share price, general market sentiments could also be responsible for a fraction of the decline.In spite of the market jitters beginning at the tail-end of year. MTN closed the year with active MoMo users increasing by 3.8 percent to 11 million, with a corresponding 38.2 percent rise in its revenue from MoMo to GH¢1.7billion for the period.
The telco continued its good run in the first quarter of 2022, posting growth in revenue – again driven largely by data and MoMo, with the contribution of Voice to service revenue beating expectations.
In the quarter, service revenue was up 34.5 percent to GH¢2.35billion and post-tax profit grew by 53.7 percent to GH¢707million.
MTN gained an additional 700,000 active mobile users, with mobile subscribers (+8.4 percent) and active data subscribers (+14.4 percent) closing the period at 27.1 million and 12.8 million respectively; all on a year-on-year basis.
This has left analysts feeling upbeat about the stock. In a note to investors, an analyst with asset management firm Databank, Gideon Amoaning-Kyei, stated that despite expectations MTN’s overall topline growth will moderate as the E-levy is expected to weigh on MoMo revenue growth in the short-term, MTN remains well-positioned to maintain its growth trajectory across key metrics.
“The key positive for us was the rapid growth in data revenues and strong increase in the data active subscriber base… We expect data revenue growth to remain robust as the economy shifts toward more data-driven solutions… We believe MTN will continue to deliver solid profitability along with a generous dividend payout, as it is well-positioned in a growing market given its large infrastructure base and wide coverage.”
On its part, MTN said regarding the E-levy, it “will continue to engage and collaborate with government and other stakeholders to ensure the industry’s long-term viability.”
“I think it has affected MTN a lot. Implementation of the E-levy will affect MTN’s MoMo collecters as the people will stop using MoMo to avoid the tax… We saw some decline in MTN share prices about a couple of week after passage of the E-levy.
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