The MTN Group on Wednesday gave indications that it would for the first time announce a loss in its financial results, blaming the development largely on the N330bn fine imposed on it by the Nigerian Communications Commission in October 2015.
Besides the N330bn fine it agreed in June 2016 to pay over three years, MTN said it also suffered “foreign exchange losses in a number of operations, losses from joint ventures and associates, additional depreciation resulting from prior hyperinflation adjustments in MTN Irancell, the Zakhele Futhi tax and share-based payment charges and professional fees incurred in respect of the settlement of the Nigerian regulatory fine and planned listing.”
In a statement on Wednesday, MTN said its financial results were “further expected to be negatively impacted by the underperformance of MTN Nigeria and MTN South Africa in the first half of 2016.”
The statement read in part, “MTN Nigeria’s first-half performance was impacted by the disconnection of 4.5 million subscribers in February 2016 in compliance with the Nigerian Communications Commission subscriber registration requirements.
The withdrawal of regulatory services, which was resolved in May 2016, the weak economy and the depreciation of the naira against the dollar also negatively impacted MTN Nigeria’s performance.
“Consolidated results in rand terms from Nigeria were affected by the weaker naira in the second half of the year. The disappointing results from MTN SA in the first six months were largely due to the poor post-paid performance.”