MTN at 17-year low af­ter earn­ings plunge

CityPress - - Business -

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.

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