logo

MTN shares knocked as mobile operator swings to loss

PUBLISHED: Wed, 08 Feb 2017 10:24:42 GMT

Share

JOHANNESBURG (Reuters) – South African mobile phone operator MTN Group expects to report a full-year loss due to a $1 billion regulatory fine in Nigeria and underperformance there and at home, it said on Wednesday, sending its shares to a two-month low.

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.

Shares in MTN, which fell more than 4 percent at market open, were 3.82 percent lower at 113.25 rand at 0733 GMT, its lowest level since December.

MTN is the largest mobile phone company in Nigeria, the continent’s biggest economy, and accounts for a third of MTN’s revenue.

It said the net effect of the Nigerian fine for the year ended December was a negative impact of 474 cents per share. MTN will issue a further trading statement on the likely range within which its headline loss is expected.

Underlying operational results for full-year 2016 were also affected by 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.

MTN has said it aims to list its Nigerian operations on the local bourse during 2017, subject to market conditions. However the unit has been battered by the weak economy, depreciation of the naira and the disconnection of 4.5 million subscribers in February last year.

The naira lost a third of its official value against the dollar in 2016 after the central bank scrapped its currency peg in a bid to alleviate dollar shortages.

(Reporting by Nqobile Dludla; editing by Susan Thomas)


Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.