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Nigerian Fine Continues To Weigh On MTN

Johannesburg - A Nigerian regulatory fine, foreign exchange losses and losing money from digital investments are key reasons behind MTN’s losses, the company said on Monday.

In an updated trading statement for its financial year ended December 31, MTN [JSE:MTN] said it expects to report a full-year basic headline loss per share of between 74 cents and 81 cents, as well as a basic loss per share of between R1.37 and R1.51.

In the previous comparable year, MTN reported a headline earnings per share of R7.46 and earnings per share of R11.09.

MTN said the full-year results, which are expected to be announced on March 2, were  impacted by the Nigerian regulatory fine, which had a 455 cents per share (cps) negative impact.

Last year, MTN agreed to pay 330 billion naira ($1.7 billion) in cash to the Nigerian government for failing to disconnect just over 5 million unregistered SIM cards in that country. MTN also committed to listing in Nigeria as part of the settlement deal.

The telecoms regulator in Nigeria first slapped its fine on MTN in October 2015, sparking a sell-off at the time in MTN shares.

Other factors impacting MTN’s full-year results are set to include:
-   Foreign exchange losses (324 cps);

-   The ‘interest unwind’ related to the Nigerian regulatory fine (45 cps);

-   The MTN Zakhele Futhi BBBBEE transaction charge (88 cps);

-   Professional fees related to the settlement of the Nigerian regulatory fine (73 cps);

-   Losses from investments in its Digital Group being mainly Africa Internet Holdings (AIH), Middle East Internet Holdings (MEIH) and Iran Internet Group (IIG) (39 cps);

-   Hyperinflation impact (37 cps); and-   Losses from the Nigeria Tower Company mainly as a result of foreign exchange losses on US dollar denominated loans (122 cps).

MTN, though, said that following exchanging its interest in the Nigeria Tower Company for the increased stake in IHS Holding this investment will be shown as “an asset available for sale” in its results.

MTN shares in Johannesburg were down just over 0.6% to R118.06 in trade on Monday just after 11:20.

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