Friday, 29th March 2024
To guardian.ng
Search
Breaking News:

MTN to announce first loss in 22 years over fine

By Adeyemi Adepetun
05 August 2016   |   2:39 am
Ahead of the MTN’s half-year result, which is scheduled to be out today, the group has alerted shareholders to its first-ever per-share loss as public company in Africa on a record fine in Nigeria and weaker earnings in South Africa.
MTN

MTN

Test runs 4G LTE Internet service

Ahead of the MTN’s half-year result, which is scheduled to be out today, the group has alerted shareholders to its first-ever per-share loss as public company in Africa on a record fine in Nigeria and weaker earnings in South Africa.

The telecommunications firm, yesterday in Johannesburg, communicated the loss, which will be between 2.85 rand and 3.15 rand per share in the sixmonths through June, to its shareholders.

In a statement, the company said the so-called headline figure, which excludes one-time items, would be a loss of between 2.55 rand and 2.85 rand per share.

According to the South African telecommunications firm, which operates in 22 countries in Africa and Middle East, the biggest contributor to the decline was MTN’s agreement to pay a record N330 billion ($1 billion) fine in Nigeria, its largest market.

The penalty was handed in October after MTN missed a deadline to disconnect unregistered subscribers, and the subsequent loss of customers further hurt operations in the country.

Meanwhile, in Nigeria, the firm through Visafone, its subsidiary, has begun the test-run of its Fourth Generation Long Term Evolution (4G LTE) Internet technology service for smart phone users in the country.

The loss is coming at a time the telecommunications firm revealed plans to list its shares on the Nigerian stock market. MTN, though silent on the percentage to issue for listing in Nigeria, is looking at 2017 to list.

A money manager at Vestact Ltd, Byron Lotter, who spoke to Bloomberg on phone, said, “TN pushed the value of the entire fine onto the income statement. This is a once-off and expectations are that they will recover in the next year.”

The shares fell as much as 4.3 per cent in early trading in Johannesburg, the most since June 27, and recovered to trade 0.1 percent higher at 132.70 rand as of 10:24 a.m. local time. The stock lost as much as a third of its value after the fine was levied in October and is still 30 percent below its level when the penalty was announced.

According to Bloomberg, the South African business, the company’s no. 2 market, is expected to report a decline in earnings before interest, taxes, depreciation and amortization margin for the half-year period.

Losses from mobile-phone towers and digital businesses also contributed to the first-half performance, as did the foreign-exchange impact of weaker operating currencies against the U.S. dollar.

Turning around the Nigeria business will be a top priority for incoming Chief Executive Officer Rob Shuter, who will join the company from Vodafone Group Plc by July 1, 2017.

Besides, as at the second quarter of 2016, Nigeria’s broadband penetration, which was 10 per cent as at 2015, rose to 14 per cent. The pioneer Minister of Communications Technology, Dr. Omobola Johnson confirmed this at the just concluded TechPlus conference and exhibition in Lagos.

In this article

0 Comments