Despite UGX 110.9 billion Tax Settlement, MTN Uganda Posts Double-Digit Growth and Record Margins in H1 2025

MTN Uganda has reported strong first-half 2025 results, delivering resilient growth and improved profitability metrics despite regulatory challenges and a one-off UGX 110.9 billion tax settlement with the Uganda Revenue Authority (URA).

CEO’s Perspective: “Strong execution in a challenging operating environment”

Commenting on the results released this morning, Chief Executive Officer Sylvia Mulinge noted: “MTN Uganda’s first half results reflect the solid momentum in our key commercial and financial metrics. This outcome was achieved against a challenging operating context characterised by changes in mobile termination rate (MTR) regulations, which impacted our voice revenue; as well as the settlement of a tax liability, which had an adverse effect on our bottom line.”

She added: “Against this backdrop, we solidified market leadership with our customer base up by 10.2% to 22.8 million, boosted by our enhanced customer value propositions. Service revenue grew by 13.3%, with robust growth in data and fintech. Our EBITDA margin expanded by 2.2 pp to 53.7%, underpinned by prudent management of our costs (with Expense Efficiency Program (EEP) savings of UGX 39.3 billion) and the comparatively benign inflationary backdrop.”

Double-Digit Service Revenue Growth

Service revenue rose 13.3% year-on-year to UGX 1.705 trillion, led by data revenue growth of 31.3% to UGX 490.2 billion and fintech revenue growth of 18.6% to UGX 524.6 billion. Voice revenue remained stable at UGX 629.0 billion, up 0.4%, despite lower incoming voice revenues caused by reduced MTRs.

Data now accounts for 28.8% of service revenue, up from 24.8% a year earlier, while fintech contributes 30.8%, up from 29.4%.

Fintech Expansion and Advanced Services

Fintech volumes rose 20.3% to 2.4 billion transactions, with values up 28.7% to UGX 89.3 trillion. Basic services revenue grew 16.2%, driven by higher P2P and cash-out usage, while advanced services rose 26.1%, reflecting growth in MoMo Advance lending and uptake of the Mastercard Virtual Card.

Mulinge highlighted: “Advanced services contribution to overall MoMo revenue increased by 1.7 pp to 30.0% (H1 24: 28.3%). We are also pleased with our partnership with MasterCard on the Virtual Card by MoMo launched in Q1, which has gained traction as we further financial inclusion and digital accessibility.”

Efficient Operations, Strong Margins

EBITDA grew 17.8% to UGX 924.2 billion, with margins rising 2.2 percentage points to 53.7%, aided by cost efficiencies and stable macroeconomic conditions.

Net debt fell 12.7% to UGX 1.3 trillion, reducing leverage to 0.7x.

Impact of Tax Settlement on Profits

The URA tax settlement reduced reported profit after tax by 9.7% to UGX 267.0 billion. Without it, adjusted profit after tax rose 27.8% to UGX 377.9 billion, with margins improving to 21.9%.

Network Investment and Coverage Expansion

MTN invested UGX 219.7 billion (excluding leases) in the network, rolling out 355 new sites and expanding 4G coverage to 88.2% and 5G to 19.0% of the population. Fibre network length grew 52.9% to 18,510 km, driving a 59.2% increase in home broadband subscribers.

Mulinge noted that geo-coverage stood at 84%, just short of the 90% NTO license requirement, and said the company is “proactively engaging the Uganda Communications Commission to extend the implementation period.”

Shared Value and CSR Initiatives

Through its Y’ello Care initiative, MTN partnered with four cultural kingdoms, benefiting more than 67,000 people with digital infrastructure, devices, and internet for hospitals and schools. UGX 1.6 billion was committed to CSR in H1 2025, and UGX 681 billion in direct and indirect taxes was paid, excluding the settlement.

Fintech Separation Approved by Shareholders

At an Extraordinary General Meeting in July 2025, shareholders approved the structural separation of MTN Mobile Money (U) Limited from MTN Uganda with 99.9% voting in favour. Mulinge said this will “position the platforms to accelerate their growth and unlock further value for our shareholders.”

Outlook: Confident in H2 Momentum

Looking ahead, Mulinge said: “As we progress into H2, we are confident that our business is well-positioned to deliver on our growth ambitions in both the connectivity and fintech businesses. We will continue to implement our rigorous expense efficiencies to ensure operational resilience to support margin and free cash flow generation.”

The company reaffirmed its medium-term guidance of “upper-teens” service revenue growth, EBITDA margins above 50%, and low-teens capex intensity.

Dividend Declaration

On the back of strong underlying performance, the Board declared an interim dividend of UGX 10.0 per share (UGX 223.9 billion), payable on 19 September 2025.