N330b fine bodes negative financial report for MTN in 2016
Africa’s most populous nation and biggest economy, Nigeria is MTN’s most lucrative but increasingly problematic market, hobbling its growth outlook. According to Reuters, the appointment of banker Rob Shuter, who resumes duties next month as chief executive, is expected to bring operational strength and step up MTN’s hunt for returns, possibly in financial services.
The telecommunications firm, which makes a third of its revenue in Nigeria, yesterday in Johannesburg, said it expected a headline loss, and would issue a further trading statement on the likely margin of loss.
Eight analysts polled by Reuters had expected the company to post a 39 per cent fall in headline earnings per share to 455 cents.The group agreed last June to Nigeria a N330 billion ($1.05 billion at the time) fine for missing a deadline to delist unregistered SIM cards from its network.
The fine, which was originally set at $5.2 billion, shaved off 474 cents from headline earnings per share, a primary profit gauge that strips out certain one-off items.
Already, MTN had cough out N80 billion to the coffers of government after an agreement was reached for a staggered payment plan. The balance of N250 billion is to be made in six tranches not later than May 31, 2019.
By the terms of agreement, the telecoms firm is to pay N30 billion to the Federal Government by March 31, 2017. In March 31, 2018, it is also to pay another N55 billion and on December 31, 2018, it will part with another N55 billion. Subsequently, on March 31, 2019, it will pay yet a tranche of N55 billion while the balance of N55 billion is to be defrayed on May 31, 2019.