MTN Blames Poor Performance On FG Fine

MTN Group yesterday blames the loss it suffered in 2016 to a $1 billion regulatory fine by the Federal Government

It claims that though Africa’s biggest market, Nigeria’s uncertain business and political environment was becoming problematic

It however hopes that new Chief Executive, Rob Shuter, who starts next month would turns things around financially

“We hope that this new CEO with a stability mentality will be able to stabilize MTN and not venture into all these risky operations,” said Momentum SP Reid analyst Sibonginkosi Nyanga.

MTN, which makes a third of its revenue in Nigeria, said it expects a headline loss, and will issue a further trading statement on the likely range within which its headline loss is expected, according to Reuters

Eight analysts polled by Reuters had expected the company to post a 39 percent fall in headline earnings per share to 455 cents.

MTN agreed in June to pay Nigeria a 330 billion naira ($1.05 billion at the time) fine for missing a deadline to cut off unregistered SIM cards from its network.

The fine, which was originally set at $5.2 billion, shaved off 474 cents per share from headline earnings per share, a primary profit gauge that strips out certain one-off items.

In the mix of paying the fine, Nigerian lawmakers for illegally repatriating $14 billion between 2006 and 2016 are investigating MTN

Shares in MTN, which fell more than 4 percent at market open, were 2.18 percent lower at 115.16 rand at 1043 GMT, the lowest level since December.

Fees incurred for a planned listing in Nigeria and under performance of its unit there and in South Africa in the first half of 2016 also affected underlying operational results for full-year 2016.

MTN has said it aims to list its Nigerian operations on the local bourse during 2017, subject to market conditions.

However, the weak economy, depreciation of the naira and the disconnection of l4.5 million subscribers in February last year have battered the unit.