MTN blames ‘perfect storm’ for loss

Telecoms firm MTN cites its recent challenges and several material issues for the loss in the six months to June.

Cape Town - MTN on Friday described recent challenges it had faced as “the perfect storm” as it reported a headline loss per share of 271 cents for the six months to the end of June 2016, down from a profit of 654 cents per share in the corresponding period last year.

Read also: MTN cuts dividend after loss

“The financial performance for the period reflects the confluence of a number of material issues, which created the ‘perfect storm’,” the telecommunications provider said as it released results for the half year that had been hit hard by a hefty fine from the Nigerian regulators.

“The group has made strides towards resolving these challenges although many of these factors fall outside of its control.”

There was some positive news for shareholders, however, with the board declaring an interim dividend of 250 cents per share and coming over quite bullish on expectations for the full year.

MTN said it expected the full year dividend to be a minimum of 700 cents, even after taking into consideration the impact of the Nigerian regulatory fine and the limited US dollar liquidity in Nigeria.

The group said the headline loss per share for the half year was mainly the result of the multi-billion-dollar fine it was handed in October last year by the Nigerian Communications Commission for missing a deadline to disconnect 5.1 million unregistered subscribers.

Excluding the impact of the Nigerian fine, MTN said, headline earnings per share declined by 69 percent to 203 cents.

But, MTN said, the headline number had also been driven down by other factors, including losses from joint ventures and associates as well as pain inflicted by currency fluctuations.

AFRICAN NEWS AGENCY