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MTN reports first annual loss in its 22 years history on Nigeria fine

02 Mar 2017, 04:32 pm
Financial Nigeria
MTN reports first annual loss in its 22 years history on Nigeria fine

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The Nigeria fine wiped out 10.5 billion rand ($768 million) or 500 cents per share from MTN’s headline earnings.

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MTN Group, Africa’s largest mobile operator, has reported its first annual loss in its 22-year history due mainly to the payment of a regulatory fine imposed on its Nigerian unit for failing to disconnect unregistered SIM cards.

In August last year, MTN announced that it had agreed to pay N330 billion over three years as part of the deal with Nigerian authorities to settle the regulatory fine. MTN also agreed to list its Nigerian unit on the local stock exchange, subject to suitable market conditions.

The Johannesburg-based company said its 2016 headline loss per share – South Africa’s main profit measure – stood at 77 cents per share or 1.4 billion rand ($108 million). The Nigeria fine wiped out 10.5 billion rand ($768 million) or 500 cents per share from MTN’s headline earnings.

MTN said its revenue rose marginally 0.4 percent to 146.89 billion rand driven mainly by data revenues, which rose to 39.55 billion rand. Total subscribers increased by 3.3 percent to 240.4 million subscribers.

In South Africa, MTN said its operations delivered a sub-optimal result in the first half of the year due to network, systems and customer service challenges. In Nigeria, MTN’s largest market, the company said it continues to improve its competitive position owing to improved network quality and attractive value propositions.

“Despite the impact of regulatory challenges and a disadvantaged competitive position in Nigeria, the result of subscriber disconnections and the withdrawal of regulatory services in the first half of the year, Nigeria continued to improve its competitive position throughout the year,” the company said.

Going forward, MTN said it expects its Nigerian unit to continue making progress with preparations to list on the local stock exchange. It also expects further improvement on MTN Nigeria’s competitive position despite a weak economic environment.

“Network quality remains a priority. This improvement in competitive position, improved network quality and capacity, smartphone penetration and increased focus on new revenue streams are expected to support upper single-digit top-line growth,” the company said.

MTN declared a final dividend of 450 cents, taking total dividend to 700 cents per share. The company’s stock closed at 12.67 rand per share in Johannesburg on Thursday, up 8.32 percent from the previous day’s close.


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