MTN says full-year loss imminent over N330bn fine
MTN said on Wednesday that it will report a loss for the 2016 financial year due in large part to the regulatory fine imposed on it in its biggest market, Nigeria.
Reuters said the company said it expects to report a loss in both basic headline earnings per share (Heps) and basic earnings per share (EPS) for the year ended 31 December 2016.
It said the Nigerian regulatory fine, imposed after MTN failed to disconnect more than five million unregistered Sim cards, is expected to have a negative impact of about R4,74 on both Heps and EPS.
But it’s not only the Nigerian fine that’s to blame for the poor performance.
Other contributing factors to the negative numbers include foreign exchange losses in several operations; losses from joint ventures and associates; additional depreciation resulting from prior hyperinflation adjustments in MTN Irancell; Zakhele Futhi black economic empowerment scheme tax and share-based payment charges; and professional fees incurred in respect of the settlement of the Nigerian regulatory fine and planned listing.
The 2016 numbers will also be “negatively impacted by the underperformance of MTN Nigeria and MTN South Africa in the first half of 2016,” MTN said.
MTN Nigeria’s first half performance was impacted by the disconnection of 4.5m subscribers in February 2016 in compliance with subscriber registration requirements of the Nigerian Communications Commission.
A withdrawal of regulatory services, which was resolved in May 2016, the weak economy and the depreciation of the naira against the US dollar also negatively impacted MTN Nigeria’s performance, it said.
MTN said a further trading statement will be issued once the group has a “reasonable degree of certainty as to the likely range within which the Heps and EPS are expected to be finalised”.