MTN to pay dividends despite loss

MTN Group says it will keep dividends payout to its investors despite a big financial loss it suffered in 2016.

The telecommunication firm announced its first annual loss in 22 years on Thursday, blaming it on a regulatory fine in Nigeria.

MTN agreed to pay a fine of 330 billion naira ($1.1 billion), reduced from $5.2 billion, in June last year after a prolonged legal battle to end a dispute in Nigeria over missing a deadline to cut off unregistered SIM cards.

The fine wiped 10.5 billion rand ($768 million) – 500 cents per share – from the firm’s 2016 headline earnings.

MTN said it would pay a total dividend of 700 cents a share despite the loss, compared with 1,310 in 2015 .

“They indicated that they will sustain a dividend of 700 cents, which investors see as a positive,” Avior Capital Markets trader, Mark Hodgson, told Reuters.

MTN said its headline loss came in at 1.4 billion rand ($108 million), or 77 cents per share last year, with headline earnings of 13.6 billion rand, or 746 cents per share, in 2015.

MTN woes in Nigeria persists, with the company facing an investigation by Nigerian lawmakers for allegedly repatriating $14 billion between 2006 and 2016, although MTN has denied doing any wrong.

MTN, which has operations in Iran, said it expects to add 8.3 million new users in the 2017 financial year.

The firm said its total subscribers increased by 3.3 percent or 7.7 million to 240 million in the year to end-December.