MTN Records First Ever Loss In 22yrs
South African telecoms giant MTN announced a $200 million loss in 2016, which reflects the most challenging year in the company’s 22-year history
The company last year suffered huge fine in Nigeria combined with currency challenges in key markets.
According to a report released by MTN Group, the rand’s depreciation against the dollar affected overall performance of the company, adding to the impact of a $1 billion by the Nigerian government.
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Nigerian authorities fined MTN in October 2015 for failing to disconnect unregistered mobile accounts in the country originally ordering it to pay $1,000 for each improperly registered SIM card.
Nigeria, Africa’s most populous country, is MTN’s largest market, where it now has 62 million subscribers out of a total of 233 million a 1.2 percent increase on 2015.
The original penalty was equal to roughly a quarter of the country’s annual federal budget.
The group said its operations in South Africa were hit by technical issues and customer service problems during the year, which also hurt the bottom line.
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“Towards the end of 2016 our two largest operations (South Africa and Nigeria)… began to show signs of a turnaround following an extended period of underperformance.”
Revenue was fractionally up for the year at 146.9 billion rand ($11.3 billion, 10.7 billion euros), the company said.
MTN share price on the Johannesburg stock exchange rose five percent after the announcement of the company results on Thursday compared to the close yesterday.
