Post Views: 449 South Africa based mobile phone operator, MTN Group, on Thursday reported its first full-year loss in 20 years, which it linked to the...
South Africa based mobile phone operator, MTN Group, on Thursday reported its first full-year loss in 20 years, which it linked to the $1.1bn (about N330bn) regulatory fine imposed by Nigeria’s Federal Government, a nation that accounts for about 40% of its revenue and profit, whose currency has suffered from huge foreign exchange losses.
MTN’s fine was 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 Nigerian fine which led to the exit of some of MTN’s top officials reportedly wiped out 10.5 billion Rand ($768 million), at 500 cents per share – from its 2016 headline earnings, South Africa’s main measure of profit.
The company’s shares, according to Reuters, however rose nearly 10% following an offer to pay a total dividend of 700 cents each, despite the loss, compared with 1,310 in 2015.
MTN also said it expects to keep it at 700 cents in 2017.
“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 Africa’s most populous nation and biggest economy still persist, with the company facing an investigation by Nigerian lawmakers for allegedly illegally repatriating $14 billion between 2006 and 2016.
MTN has denied any wrongdoing.
Founded with Pretoria’s help after the end of white rule in 1994, MTN is seen as one of post-apartheid South Africa’s biggest commercial successes but clashes with regulators in recent years have exposed governance issues and hobbled growth.