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Nigerian fine, weak rand clobber MTN

04 August 2016, 10:27Gareth van Zyl, Fin24

Johannesburg - Africa’s biggest mobile network by subscribers, MTN  [JSE:MTN], has warned that its Nigerian fine woes and weak currencies are expected to dent its first-half results.

MTN will release its interim results on August 5 and the company expects its first-half loss per share to be between R2.85 and R3.15 for the period through to June.

Meanwhile, the company also said its headline loss per share is expected to be between R2.55 and R2.85.

A key factor harming MTN is its Nigerian fine, which was issued to the company last year for its failure to disconnect 5 million unregistered SIM cards.

Earlier this year, MTN reached an agreement to settle the fine with Nigerian regulators but this amount is set to impact its results.

“The income statement charge reflects the present value of the balance outstanding at 10 June 2016 of Naira 280 billion (USD1,418 billion, using the exchange rate prevailing at the time), reduced by the reversal of the provision made in December 2015 of Naira 119,6 billion (USD 600 million, using the exchange rate prevailing at the time),” said MTN on Thursday.

“In total the net effect of the Nigerian regulatory fine on the current period was a negative impact of 474 cents per share (cps),” said MTN.

MTN added that its Nigerian and South African units - its two biggest markets - have experienced performance challenges.

However, the company has further blamed the depreciation of the rand, losses from tower companies and its digital businesses, hyperinflation adjustments regarding its Iranian operation, higher professional service charges and impairments in South Sudan for dragging down its results.

MTN is Africa’s biggest network with over 200 million subscribers across the continent and in the Middle East.

- Fin24


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