MTN at 17-year low after earnings plunge
MTN Group’s shares declined the most in more than 17 years after Africa’s biggest mobile telecommunications company said 2015 earnings fell at least 20% and talks on a record $3.9 billion (R60.3 billion) fine in Nigeria remained unresolved.
The stock fell 19%, the most since August 1998, to R124.99 on Friday morning, which is the lowest it has been since February 3. It closed at R126.
That snapped five consecutive days of rises until Thursday, and extended the stock’s decline since the Nigerian penalty was made public in October.
Basic earnings per share excluding one-time items were at least R3.07 lower than the R15.36 reported in 2014, the company said after the market closed on Thursday.
MTN blamed the decline on a loss of business in Nigeria, where regulators withheld services and forced the company to cut off 5.1 million customers.
“At this juncture, it looks like some investors might be throwing in the towel on MTN,” Sasha Naryshkine, a director at money manager Vestact, said by phone.
“There are many uncertainties feeding into the company’s share price right now, not least of which are the regulatory uncertainties in Nigeria.”
The company is locked in discussions with the government over the $3.9 billion fine imposed after the wireless operator missed a deadline to disconnect the unregistered subscribers.
A court in Lagos last month adjourned a hearing called by MTN until March 18 so the two sides could reach a settlement.
“Investors need clarity,” Naryshkine said. “And they really need clarity on what is happening with this Nigerian fine.”
Security agencies in Nigeria, battling insurgents from Islamist fundamentalist group Boko Haram, have sought to cut off mobile services to unregistered users as they fight crime in a country with poor identity records.
“There remains some uncertainty [surrounding the outcome of the talks],” MTN said.
In December, the penalty was reduced from an original $5.2 billion.