MTN has reported a $108 million annual loss, its first in two decades, hit by a regulatory fine in Nigeria, unfavourable currency moves and promised to pay dividend. This is according to the financial performance report it released on Thursday. One of Africa’s biggest mobile phone operator, MTN Group, has suffered its first annual loss in revenue projections in two decades, due mainly to a fine imposed on it by the Nigerian telecoms regulatory body, Nigerian Communications Commission (NCC).
It would be recalled that MTN, in June 2016, agreed to pay a fine of $1.1 billion, reduced from an initial fine of $5.2 billion, after a prolonged legal battle to end a dispute in Nigeria for failing to keep to the deadline to cut off unregistered SIM cards from its network.
The fine on the GSM firm, believed to be the most active but increasingly problematic market holder, said it had made it wipe $768 million from its profit projection, amounting to loss of 500 cents per share in 2016. Despite the loss, MTN shares rose in value by nearly 10 percent after the mobile network operator promised that it would pay 700 cents dividend per share .
The company still has the biggest customer-base, but its woes still persist, with it facing an investigation by Nigerian lawmakers for allegedly repatriating about $14 billion between 2005 and 2016, illegally. The Company has denied any wrongdoing amidst recent destruction of its properties by angry youths over the February xenophobic attacks on Nigerians in South Africa. “If you strip out the Nigerian fine, which is a once off thing, and forex moves, this company is not in a such bad shape operationally,” said Momentum SP Reid Stockbrokers’ analyst Sibonginkosi Nyanga.
Without one-off and non-operating items, which include about 6 billion rand in forex losses, MTN would have managed a profit, albeit 14 percent lower than 2016’s earnings. MTN’s executive chairman Phuthuma Nhleko called the loss, at 77 cents per share, a “black swan event”. “For even the most successful companies, you do have black swan events in your history and this was it. We hopefully are not going to see something like this again,” Nhleko told Reuters on the sidelines of the company’s results presentation.