MTN Uganda : HY23 Earnings Release

MTN UGANDA LIMITED UNAUDITED

FINANCIAL RESULTS

For the six months ended 30 June 2023

MTN Uganda Limited	1
Unaudited financial results for the six months ended 30 June 2023

Contents

1.	Introduction	3
2.	Our CEO's Message	4
	Operational Review	5
	Our Outlook	6
	Final Dividend Recommendation	7
	Directors Statement	7
3.	Unaudited Consolidated Financial Statements	8
	Consolidated Statement of Comprehensive Income	8
	Consolidated Statement of Financial Position	9
	Consolidated Statement of Changes in Equity	10
	Consolidated Statement of Cash Flows	11

2	MTN Uganda Limited
Unaudited financial results for the six months ended 30 June 2023

MTN UGANDA LIMITED UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023

Kampala, Uganda | Friday 4th August 2023

MTN Uganda Limited (MTN Uganda) today announces unaudited financial results for the six months ended 30th June 2023.

SALIENT FEATURES

• Mobile subscribers increased by 11.2% to 18.1 million
• Active data subscribers grew by 21.4% to 6.9 million
• Active fintech subscribers increased by 11.6% to 10.9 million
• Service revenue grew by 15.0% to Ush 1,250 billion
• Data revenue grew by 22.1% to Ush 290.2 billion
• Fintech revenue grew by 18.6% to Ush 358.3 billion
• Earnings before interest, tax, depreciation, and amortization (EBITDA) grew by 16.8% to Ush 641.0 billion
• EBITDA margin up by 0.4 percentage points (pp) to 50.6%
• Capital expenditure (IAS 17) for the period decreased by 0.02% to Ush 201.7 billion
• Profit After Tax (PAT) increased by 17.8% to Ush 228.0 billion
• First interim dividend up by 19.0% to Ush 5.6 (Ush 125.4 billion)

*Unless otherwise stated, financial and non-financial growth rates are presented on a year-on-year basis (YoY, 6M to 30 June 2023 versus 6M to 30 June 2022

Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale. Fintech includes payments, remittances, insurance, airtime lending and e-commerce. Active mobile users is a count of all subscribers at a point in time which had a revenue generating event in the specified period of time (90 days) prior to that point in time. Active data users is a count of subscribers who during the past 30 days had data usage greater than or equal to 5 megabytes. Active fintech users is a count of subscribers who have transacted on the platform during the past 30 days.

MTN Uganda Limited	3
Unaudited financial results for the six months ended 30 June 2023

Our CEO's Message

MTN Uganda CEO, Sylvia Mulinge

During the first half of 2023, we delivered a resilient performance in uncertain and evolving local and global macroeconomic conditions. The heightened inflationary environment during the period had a significant impact on consumers and business operations. Inflation in H1 2023 averaged 8.0%, compared to 4.6% in H1 2022.

We are, however, encouraged by an easing of inflation in Q2, which closed the half at a rate of 4.9%, compared to a January 2023 peak of 10.4%. This was achieved on the back of improved shilling stability and receding food, fuel and utility prices over the six months. The interest rate environment has also remained relatively stable with the policy rate fixed at 10% in the period under review. This improvement in macroeconomic conditions should ease some of the pressure on our customers and business going forward.

Against this backdrop, our service revenue growth of 15.0% was in line with our medium-term target, with a resilient performance in voice and a double-digit growth in our data and fintech revenues. That said, the effects of heightened inflation drove cost pressures upwards, which we mitigated through expense efficiencies. This supported the expansion in our EBITDA by 16.8% and EBITDA margin by 0.4pp to 50.6%.

Building on our momentum from Q1, we continued to deliver on our business strategy, with a focus on increased customer and stakeholder engagement to drive sustainable and inclusive growth. Improving our segmented customer value plans and increased network investment to cement our leading network quality position, has positively stimulated our subscriber base by 11.6% to 18.1 million customers. This pleasing outcome demonstrates the appreciation of the brand, and this gives us the confidence in our future growth potential.

Our investment in this period has been focused on additional spectrum acquisition and acceleration of 4G connectivity alongside our fibre to home strategy. We are pleased to report that the Uganda Communications Commission (UCC) granted us spectrum on the 2600Mhz, 2300Mhz, 700MHz and e-Band in the period. This will go a long way in enhancing our future network performance and 5G operationalisation, which will augment our growth ambitions. In terms of network rollout, we have added 361 4G sites in the period, boosting 4G population coverage to 83.4% (H122: 67.7%). Our 3G and 2G coverage grew to 92.4%(H122:91.0%)and98.4%(H122:98.0%)respectively.

On the commercial side, we ramped up efforts on smartphone adoption through partnerships with manufacturers and enhanced our device financing programme to address the affordability challenges.These initiatives drove a 24.1% growth in smartphone users and improved our smart phone penetration to 35.7% (+3.7pp).

On the fintech front, our efforts were directed towards digitalisation of our customer value chains to drive cashless payments with MoMo Pay and enhancements in our international remittances portfolio to support borderless payments in key trade markets. This has augured well for our advanced revenue contribution growing to 26.3% (+8.8pp) in line with our medium-term objectives.

As we aim to deliver a bold and new digital world for our customers, MTN Uganda launched 'API as a Service', a solution that provides our customers access to our proprietary software. We also relaunched the Webphone with Webex solution, a digital solution that allows our customers in the diaspora to communicate at local rates. These services will support our intent of enabling digital transformation for our customers.

In line with our Ambition 2025 social commitment to prioritise shared value, we continued to drive ESG initiatives in our market. As we celebrate 25 years of operationinUganda,ourstaffparticipatedintheannual21 Days of Y'ello care, this time for 25 days, under the theme "Empowering Communities to Drive Economic Recovery" training communities in digital skills. We also contributed Ush 36 billion to the Uganda Communications Universal Service and Access Fund for the year 2023 aligning with ourcommitmentto increase access and reduce the costof communication for our customers. Both these initiatives will further enable digital and financial inclusion in line with the Uganda Vision 2040 goals.

In Governance, we expanded our board constitution to seven directors adding Ms. Winnie Tarinyeba Kiryabwire following her approval at the Annual General Meeting. She brings a wealth of experience and expertise in corporate law, securities regulation, and corporate governance I take this opportunity to welcome her to the MTN family and wish her the best in this journey.

We are encouraged with ourperformance thus farand the improvements in our macro environment, which should bode well for our performance in the second half of the year. I reiterate management's commitment to ensure sustained business growth and EBITDA margin resilience as per our guidance.

4	MTN Uganda Limited
Unaudited financial results for the six months ended 30 June 2023

KEY HIGHLIGHTS

Ush (in millions)	H1 23	H1 22	YoY
Total Revenue
	1,267,089	1,094,031	15.8%
Other Income	55	713	-92.3%
Service Revenue	1,250,059	1,087,299	15.0%
Voice	544,659	497,681	9.4%
Data	290,239	237,646	22.1%
Fintech	358,282	302,120	18.6%
Others	56,879	49,852	14.1%
Expenses		626,117	546,038	14.7%
EBITDA		641,027	548,706	16.8%
EBITDA Margin	50.6	50.2	+0.4pp
Depreciation & Amortization	211,174	195,475	8.0%
EBIT	429,853	353,231	21.7%
EBIT Margin	33.9	32.3	1.6pp
Net Finance Costs	104,212	77,588	34.3%
Profit Before Tax (PBT)		325,641	275,643	18.1%
Taxation	97,606	82,083	18.9%
Profit After Tax (PAT)		228,035	193,560	17.8%
Earnings Per Share		10.2	8.6	17.8%
PAT Margin	18.0	17.7	0.3pp
Capex	201,743	201,793	-0.0%
Capex Intensity	15.9%	18.4%	-2.5pp
Non-Financials ('000)
Overall Mobile Subscribers	18,080	16,255	11.2%
Data Subscribers	6,915	5,694	21.4%
Fintech Subscribers	10,939	9,806	11.6%

NOTES

• Voice revenue includes interconnect and outbound roaming voice.
• Data revenue includes outbound roaming, fixed and mobile data, Digital revenue excludes bulk SMS and USSD services.
• Fintech revenue includes MTN Xtra-time and mobile financial services.
• CAPEX excludes right-of- use assets.
• Other service revenue includes inbound roaming data, SMS, USSD, Information and Communications Technology (ICT) & infrastructure and devices

OPERATIONAL REVIEW

Voice performance maintains positive growth momentum.

Service revenue increased by 15.0%, driven by the continued momentum in our voice portfolio. Our data and fintech segments remained robust with strong double-digit performance recorded.

Voice revenue increased by 9.4% underpinned by solid growth in our customer base. Our net additions in the half increased by 910k customers to 18.1 million as a result of strong gains in our customer value management addressing product affordability and competitiveness.OurcustomerNPS also improvedwith notableincrementsinournetworkqualityperformance, product innovation and brand appreciation. On the commercial side, we revamped our regional structure which has improved engagement with our customers. Further to this, our efforts to decongest 2G traffic through migration of customers to 3G has further enhanced the customer experience.

Our voice contribution to service revenue decreased to 43.0% (H122: 45.5%) as our data and fintech revenue segments maintained their growth momentum.

Data revenue increased by 22.1% with our active data subscribers growing by 21.4% to 6.9 million. This has been anchored by our increased focus on driving smartphone adoption; we have partnered with TakeNow in the MTN Pay Mpola Mpola drive and intensified MTN Kabode smartphone sales. Our smart phone penetration in the period improved to 35.7% (+3.7pp) with 24.1% growth in smartphone users. Our MB per user has also grown strongly by 25.0% in this period.

We also note structurally higher demand for data services from our enterprise business segment as we improve our offering in the SME space. These consolidated efforts have increased our data traffic by 53.4% with over two thirds carried on 4G.

Home broadband revenue grew by 50.4% supported our aggressive activation strategy which yielded a 65.0% growth in our subscriber base.

The overall data contribution to service revenue increased to 22.9% (H122: 21.7%).

MTN Uganda Limited	5
Unaudited financial results for the six months ended 30 June 2023