MTN Group anticipates 2016 loss, blames Nigeria fine - Mobile World Live

MTN Group anticipates 2016 loss, blames Nigeria fine

09 FEB 2017

MTN Group announced a $1 billion regulatory fine in Nigeria and other struggles in the market, as well as at home in South Africa, contributed to an overall loss for 2016.

In a trading statement released on the Johannesburg stock exchange ahead of its official financial results statement on 2 March, MTN said it expects to be in the red for 2016. The extent of the loss is not yet known, but MTN did say it would release another trading statement with more details.

Nigeria, where the company is the largest operator, proved particularly challenging last year.

The company was originally hit with a fine of $5.2 billion in Nigeria after failing to cut off unregistered SIM cards from its network in 2015 in accordance with new laws in the country to crackdown on crime and terrorism.

It eventually settled to pay $1.67 billion on 10 June last year, after long-running negotiations with the country’s regulator.

The situation saw the departure of CEO Sifiso Dabengwa, with group chairman Phutuma Nheklo taking temporary charge. New permanent CEO Rob Shuter is set to start in the role next month.

In addition to the fine, MTN said it was hit by under-performance of MTN Nigeria and MTN South Africa in the first half of 2016.

New laws imposed by Nigerian regulators over subscriber registration meant 4.5 million of its customers were disconnected in February 2016.

It was also impacted by a weak economy and depreciation of the naira against the US dollar, and charges incurred for a planned listing in the country.

In South Africa, the company said it had disappointing results due to poor postpaid performance.

Other contributing factors to its struggles were foreign exchange losses in a number of operations, losses from joint ventures and associations, as well as other tax and charges.

Its Nigeria struggles are also far from over. MTN is currently being investigated for illegally repatriating $14 billion from the country, between 2006 and 2016.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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