MTN blames ‘imminent’ full-year loss on NCC fine

MTN Group says it is expecting to report a full-year loss because of the N330bn regulatory fine imposed on it by the federal government.

In a statement released on Wednesday, MTN said the fine took 4.74 rand from full-year earnings per share.

The telecommunications outfit was fined N330bn for its failure to disconnect 5.1 million unregistered SIM cards.

In 2016, it recorded a loss for the first time in its history and blamed it on the fine.

“The performance in Nigeria was hurt by the forced disconnection of 4.5 million customers by the government a year ago, regulatory penalties and the weakness of the naira against the dollar. In South Africa, lower demand for mobile-phone contracts weighed on earnings,” MTN said.

“Together, those factors wiped out all of MTN’s 2016 earnings, after the company reported profit of 7.46 rand per share in 2015.”

The company’s shares traded for 3.2% less of its value at 114 rand on the stock exchange market in Johannesburg, South Africa.

Since the beginning of 2017, MTN shares have lost 10%, bringing the company’s value to 214 billion rand ($15.8 billion) while Vodacom Group Ltd., a rival in South Africa, is valued at about 222 billion rand.

Analysts have expressed optimism at the chances of the company making a turnaround under the leadership of Rob Shuter, banker and former Vodafone executive, who is expected to resume in March.

“I would not be surprised if they are writing off as much as possible now so that new management can come in and sweep the floor,” Bruce Main, a money manager at Ivy asset management in Johannesburg, told Bloomberg.

“I see the new management as a big positive.”

Apart from the fine, MTN is also being investigated for allegedly repatriating $14 billion from Nigeria between 2006 and 2016.

MTN, which had earlier announced that it would list on the NSE in January, has put off the listing until the market conditions are “favourable”.