MTN Blames NCC For Loss In 2016
MTN Group for the first time since its inception recorded a loss of 4.74 rand from its 2016 earnings per share.
According to the telecommunication company the loss was as a result of the N330bn fine imposed on them by the Nigerian Communications Commission, NCC for failure to disconnect unregistered sim cards and the fall of naira against the dollar.
MTN in a statement released on Wednesday, said the fine took 4.74 rand from full-year earnings per share.
Advertisement
The statement reads “The performance in Nigeria was hurt by the forced disconnection of 4.5 million customers by the government a year ago, regulatory penalties and the weakness of the naira against the dollar. In South Africa, lower demand for mobile-phone contracts weighed on earnings,” MTN said.
“Together, those factors wiped out all of MTN’s 2016 earnings, after the company reported profit of 7.46 rand per share in 2015.”
The company’s shares traded for 3.2% less of its value at 114 rand on the stock exchange market in Johannesburg, South Africa.
Since the beginning of 2017, MTN shares have lost 10%, bringing the company’s value to 214 billion rand ($15.8 billion) while Vodacom Group Ltd., a rival in South Africa, is valued at about 222 billion rand.
Advertisement
Analysts have expressed optimism at the chances of the company making a turnaround under the leadership of Rob Shuter, banker and former Vodafone executive, who is expected to resume in March.
“I would not be surprised if they are writing off as much as possible now so that new management can come in and sweep the floor,” Bruce Main, a money manager at Ivy asset management in Johannesburg, told Bloomberg.
“I see the new management as a big positive.”
Recall that MTN in June, 2016 was fined N330bn by NCC for failure to disconnect unregistered sim cards.
