MTN expects 20% profit improvement
MTN GROUP has swung back to profitability after it announced yesterday that it expected an improvement of at least 20 percent in headline earnings a share and earnings a share for the six months to June.
MTN, Africa’s biggest mobile network operator by sales, said that it expected to report interim 2017 basic headline earnings a share of between 210 cents and 230c and basic earnings a share of between 280c and 300c.
This compared with a headline loss per share of 271c and attributable loss per share of 301c reported in the prior comparable period.
Headline earnings account for revenue generated through ongoing operations or investment activities that increase a company’s bottom line.
The mobile operator, which is still smarting from a $1.1 billion (R14.32bn) fine imposed by the Nigerian government in June last year, said the negative performance in the prior year period was mainly as a result of non-reccurring costs.
The non-recurring costs included the “Nigeria regulatory fine of 474c a share, which was fully expensed in prior periods, professional fees related to the fine of 73c a share and losses of 136c a share from MTN’s 51 percent equity interest in Nigeria Tower InterCo mainly as a result of unrealised losses on US dollar-denominated loans,” the group said.
Earlier this year, MTN reported its first loss in two decades for which it cited the hefty fine imposed by the Nigerian government saying it had wiped about R10bn from its headline earnings.
The group reported a headline loss of R1.4bn in the year to December 2016, compared with headline earnings of R13.6bn the previous year.
Yesterday MTN shares plunged as much as 7 percent, the lowest since June last year. It later clawed back some of its losses to close at R118.62 a share, 6.77 percent lower on the day.