South Africa's MTN pegs H1 loss on Nigeria fine

by Reuters 0

South Africa's MTN agrees to pay $1.67 bln of Nigeria fine

South African mobile phone operator MTN Group flagged a half-year loss on Thursday, blaming a hefty fine in Nigeria and underperformance at home.

MTN said on June 10 it had agreed to pay a heavily reduced fine of 330 billion naira ($1.2 billion), or a third of the initial penalty, in a settlement with Nigeria for missing a deadline to deactivate more than 5 million unregistered SIM cards.

MTN, Africa’s biggest mobile phone group, said its headline loss was expected to come in a range of 285 cents to 255 cents per share in the six months to end-June.

In total, the net effect of the Nigerian fine on the current period was a negative impact of 474 cents per share.

Underlying operational results for half-year 2016 were further affected by under-performance of MTN Nigeria.

Earnings were further negatively impacted by foreign exchange losses of 135 cents per share.

Relatively weaker operational performance of MTN South Africa, which is expected to report a decline in EBITDA margin, impacted by a marked increase in the sale of lower-margin handsets during half-year 2016.