South Africa owned telecommunication giant, MTN, on Thursday, August 4, reported a first-ever per-share loss as a public company as a result of weaker earnings in South Africa.
The loss would be between 2.85 rand and 3.15 rand per share in the six months through June, MTN said in a statement on Thursday.
The headline figure, which excludes one-time items, would be a loss of between 2.55 rand and 2.85 rand per share. The biggest contributor to the decline was MTN’s agreement to pay a record N330 billion ($1 billion) fine in Nigeria, the company’s largest market.
The penalty was levied in October after Africa’s biggest mobile-phone operator missed a deadline to disconnect 5.1 million unregistered subscribers.
“MTN pushed the value of the entire fine onto the income statement,” Byron Lotter, a money manager at Vestact Ltd., which holds MTN stock, said by phone. “This is a once-off and expectations are that they will recover in the next year,”he added.
According to Bloomberg, the shares fell as much as 4.3 per cent in early trading in Johannesburg, the most since June 27, and recovered to trade 0.1 per cent higher at 132.70 rand as of 10:24 a.m. local time.
The stock lost as much as a third of its value after the fine was levied in October and is still 30 per cent below its level when the penalty was announced.
The South African business, the company’s number two market, is expected to report a decline in earnings before interest, taxes, depreciation and amortisation margin for the half-year period, MTN said.
Losses from mobile-phone towers and digital businesses also contributed to the first-half performance, as did the foreign-exchange impact of weaker operating currencies against the U.S. dollar.
Also, MTN Group Ltd would this morning declare the full impact of the N330billion fine agreed with the Nigerian Communications Commission (NCC) to settle an unprecedented sim card fine as the operator presents its interim results for six months January 1- June 30, 2016.
