By JAMES ANYANZWA

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Rwanda’s mobile phone operator MTN Rwandacell Plc posted 28.9 percent decline in net profit for the period ended December 31.

The Rwanda Stock Exchange (RSE)-listed telco blames the drop in net earnings on increasing financing costs, weakening currency, forex shortages and the elimination of the local Mobile Termination Rates (MTR).

“Rwanda’s macro-economic environment presented a number of challenges in 2023, such as the local currency depreciation against the dollar and foreign exchange shortages which resulted in higher utility costs,” said Mapula Bodibe, the telco’s chief executive.

“These factors contributed to a challenging operating environment during the year, despite an improvement in GDP growth at 8.2 percent.”
The company’s profit after tax fell to Rwf11.45 billion ($8.79 million) from Rwf16.1 billion ($12.36 million) in the previous accounting period (2022), according to the company’s audited financial statements.

Read: MTN nets $64m in Rwanda and Uganda markets

Total revenues increased by 11.2 percent to Rwf249.38 billion ($191.51 million) from Rwf224.27 billion ($172.23 million) as total expenses grew by 15.3 percent to Rwf133.58 billion ($102.58 million) from Rwf115.87 billion ($88.98 million) in the same period.

During the period under review Rwandan franc lost 18.05 percent of its value against the dollar in 2023 while the Rwanda Utilities Regulatory Authority implemented a directive in August 2023 cutting local MTRs to zero.

“This negatively impacted our financial performance and spurred increased pricing aggression and value destruction in the market,” said Ms Bodibe.

“Notwithstanding the challenging operating environment, MTN Rwanda remains steadfast in executing its 2025 strategy and creating value for our shareholders. As we execute our strategy, we’ll continue to invest in our network infrastructure to enhance capacity, expand coverage and unlock cost efficiencies to improve the profitability of the business.”

The telco’s total service revenue grew by 11.2 percent to Rwf246.46 billion ($189.27 million) from Rwf221.71 billion ($170.26 million) and net finance costs increased by 15.8 percent to Rwf36.48 billion ($28.01 million) from Rwf31.52 billion ($24.2 million).

Its data revenues rose by 21.4 percent to Rwf45.06 billion ($34.6 million) from Rwf37.11 billion ($28.49 million) supported by the launch of the 4G network, which saw a 506 percent rise in 4G users helped by the introduction of affordable, competitive and customised data packages.

Voice revenue declined by 8.2 percent to Rwf83.63 billion ($64.22 million) from Rwf91.1 billion ($69.96 million), largely as a result of the effects of the MTR cuts.