MTN ex­pects 20% profit im­prove­ment

The Star Early Edition - - COMPANIES - Sizwe Dlamini

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.

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