MTN Rwandacell Plc’s net earnings dropped significantly by 28.9 per cent to Rwf11.4 billion in 2023, despite an 11 per cent increase in service revenue to Rwf246.5 billion and a 6.5 per cent year-on-year growth in subscriber base.

The company blamed the decline on higher finance costs related to tower leases as well as a depreciation of the Rwandan franc, which the company said is affecting their foreign obligations.

Mapula Bodibe, MTN Rwanda CEO said in a statement that a depreciation of the Rwandan franc against the US dollar likely affected costs of utility – such as fuel – which put additional strain on business.

"Rwanda’s macroeconomic environment presented a number of challenges in 2023, such as the local currency depreciation against the US dollar and foreign exchange shortages which resulted in higher utility costs,” she said.

MTN says in its latest financial statements that they identified that incorrect present value of future lease payments was calculated and as a consequence, right of use assets and lease liabilities were understated.

This led to an understatement of the annual depreciation charge and finance costs and, therefore, an overstatement of retained earnings.

This implies that MTN Rwanda made a mistake in their financial reporting. They didn't calculate the value of their cell tower leases correctly. They did not include some money they owe for future tower leases and the value of the equipment they are using in their financial statements.

" This resulted in the reported profit being higher than the actual, leading to the restatements disclosed in their annual financial results for 2023,” MTN said in the statement.

They also underreported the expense of using the cell towers and the interest they owe on the rentals.

MTN leases towers from IHS Rwanda.

The telecommunication company made adjustments in their financial statements to reflect the true value of the equipment rentals. This saw the firm’s 2022 net profit revised down by Rwf2.9 billion, now at Rwf16 billion.

Meanwhile, MTN Rwanda’s voice revenue declined by 8.2 per cent to Rwf84 billion in 2023.

The company’s financial technology business segment grew 30.2 per cent to Rwf97 billion driven mainly by revenue growth in mobile money and a surge in active mobile money subscribers.

The volume and value of mobile money transactions grew by 32 per cent to Rwf1.9 billion and 45.4 per cent to Rwf21 trillion, respectively

Active Mobile Money subscribers increased by 13.9 per cent year-on-year to 4.9 million.