MTN shares advance 9% despite reporting first-ever annual loss

Africa’s biggest mobile-phone operator, MTN, saw its share price climb nearly 9% in morning trade on Thursday (2 March), despite reporting its first annual loss in its 22-year history.

By 10h30, shares in MTN advanced 8.95% to R127.48 on the JSE, giving the group a market cap of R220.5 billion.

MTN reported a marginal 0.4% rise in revenue for the year ended December 2016, to R146.89 billion, however, it also recorded a headline loss per share of 77 cents.

Additional highlights:

  • EBITDA decreased by 13.2% to R51.981 billion
  • Group subscribers increased by 3.3%, or 7.877 million, to 240.4 million
  • Data revenue increased by 16.7% to R39.546 billion
  • Voice traffic decreased by 1.7% and data traffic increased by 143%
  • Capex increased by 19.6% to R34.920 billion
  • MTN delivered a final dividend of 450 cents per share.

“MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, precipitated by a number of material regulatory, macro-economic and political challenges experienced across our regions. However, despite these difficulties, the business began to show encouraging first signs of a turnaround,” the group said in a statement.

Revenue increased marginally to R146.89 billion while organic revenue increased 2.9%, the group said.

MTN highlighted a number of once-off costs which negatively impacted EBITDA. These costs included the Nigerian regulatory fine of R10.499 billion; professional fees related to
the settlement of the Nigerian regulatory fine of R1.324 billion; and the MTN Zakhele Futhi share-based payment expense of R1.008 billion.

MTN said the Nigerian fine had a 500 cents negative impact on HEPS. In addition, HEPS was negatively impacted by foreign exchange losses of 329 cents.

It also said that group revenue was negatively impacted by the depreciation of the rand against the US dollar. The rand has however, shown strong growth against the buck so far in 2017.

Bloomberg reported on Wednesday that MTN is moving closer to a listing on the Nigerian stock exchange, a move, it said citing analysts, could help it regain goodwill among Nigerians and make it less vulnerable to regulatory crackdowns.

Read: MTN reboots after the most challenging year in its history

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MTN shares advance 9% despite reporting first-ever annual loss