MTN Group reports 22% growth in fintech as MoMo numbers stagnate
By Kingsley Odii
Africa’s largest telecommunications company, MTN Group, has announced impressive growth in its fintech unit despite stagnant user growth in its mobile money (MoMo) service. The company reported a 22% increase in its fintech services during the first half of the year, while MoMo user numbers remained unchanged.
MTN Group revealed that its service revenue reached $5.6 billion for the first half of the year, when measured using constant currency exchange rates. This surge marks a 15.2% growth for the telecommunications giant, which operates in 16 African countries.
The growth was mainly driven by a 24% increase in revenue from data services, a 22% increase from fintech services, and a 6% increase from voice services. However, the company’s pretax decreased slightly from $979 million to $964 million, while EBITDA margin dropped from 44% to 43.6%. MTN Group attributed these declines to inflation and foreign exchange depreciation, which exerted upward pressure on costs.
MTN, Group currently serves 291 million subscribers, representing a year-on-year increase of 3.6%. However, the company acknowledged that its growth was hampered by the conflict in Sudan.
Meanwhile, active data subscribers rose by 7.4% to 139 million, while MoMo customers remained steady at 60 million. The company cited Nigeria’s cash scarcity and a focus on active wallets, as well as a base clean-up in Cote d’Ivoire, as reasons for the flat growth in MoMo user numbers. Nevertheless, active agents grew by 18% to 1.3 million.
In an effort to further bolster its fintech business, MTN Group, announced the signing of a memorandum of understanding with Mastercard. The payment company is set to acquire a minority stake in MTN’s fintech unit for an estimated value of $5.2billion. This move follows Mastercard’s recent $100 million investment in Airtel’s fintech business.
While no interim dividend was declared for the first half of the year, MTN Group confirmed that it aims to distribute a minimum final dividend of $0.17 at the end of the year.
“We are pleased with the overall performance of our business, including the significant growth achieved in our fintech unit,” said the CEO of MTN Group, Ralph Mupita.
“The partnership with Mastercard further validates the strength and potential of our fintech business, and we are confident that it will lead to even greater opportunities for growth and innovation,” he added.
The reported financials and strategic partnership with Mastercard signify MTN Group’s commitment to driving financial inclusion across Africa and leveraging the potential of its fintech services to provide convenient and accessible financial solutions to its customers.
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