A poor financial performance in Nigeria and South Africa – on top of a massive fine being imposed by the Nigerian government – will push MTN’s headline earnings per share into the red, the group announced.<\/p>\n
MTN said that expects to report negative basic headline earnings per share\u00a0(HEPS) and basic earnings per share (EPS) for its half-year results for\u00a02016, compared to the\u00a0reported HEPS\u00a0of 654 cents and EPS of 653 cents in the year prior.<\/p>\n
The expected decline in the HEPS and EPS is primarily as a result of the Regulatory fine imposed on MTN\u00a0Nigeria, following a resolution with the Federal Government of Nigeria on\u00a010 June 2016.<\/p>\n
The Nigerian regulatory fine is expected to have an estimated negative impact of 474 cents on\u00a0HEPS and EPS, respectively.<\/p>\n
The Nigerian Communication Commission (NCC) hit MTN with a\u00a0$5.2 billion fine last year, for failing to disconnect more than five million unregistered SIMs on its network.<\/p>\n
This\u00a0fine was later reduced by 25%, but MTN\u00a0elected to take the matter to Nigeria\u2019s courts.\u00a0It later dropped the case and paid a \u201cgood faith\u201d sum of \u20a650 billion (R3.8 billion at the time<\/a><\/strong>)\u00a0in an effort to achieve an amicable settlement.<\/p>\n The groups finally settled on an amount of\u00a0\u20a6330 billion, paid over three years\u00a0 \u2013 the equivalent of R25 billion.<\/p>\n The \u20a650 billion (R3.8 billion) paid in good faith and without prejudice by MTN Nigeria forms part of the monetary component of the settlement \u2013 leaving a balance of \u20a6280 billion outstanding which will be discharged\u00a0over time to 2019.<\/p>\n Other poor performances<\/strong><\/p>\n Foreign exchange losses in a number of operations, losses from joint ventures and associates and\u00a0hyperinflation adjustments on MTN Irancell are also expected to have a negative impact on HEPS and EPS for\u00a0HY2016, MTN said.<\/p>\n “The results are further expected to be negatively impacted by the under-performance of MTN Nigeria and\u00a0MTN South Africa,” MTN said.<\/p>\n “MTN Nigeria\u2019s performance was impacted by the disconnection of 4,5 million subscribers in\u00a0February 2016, the final batch of subscribers to be disconnected in compliance with the Nigerian\u00a0Communications Commission subscriber registration requirements.”<\/p>\n “MTN South Africa is expected to report a decline in\u00a0the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin, impacted by the marked\u00a0increase in handsets sold during HY2016,” it said.<\/p>\n MTN is currently in the process of finalising its financial results for the six months ended 30 June 2016,\u00a0which will be announced on SENS\u00a0on Friday, 5 August\u00a02016.<\/p>\n By 11h45, MTN’s shares were trading lower on the JSE, down R3.78 or 2.7%, at R137.90.<\/p>\n MTN and CWU agree on salary increases<\/a><\/strong><\/p>\n MTN may launch alternative BEE deal<\/a><\/strong><\/p>\n MTN beefs up mergers and acquisitions team<\/a><\/strong><\/p>\nMore on MTN<\/h3>\n