MTN reports first loss in 20 years

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Stanley Opara with agency report

MTN Group on Thursday announced that it posted its first annual loss in two decades, after it was hit by the $1.1bn regulatory fine in Nigeria and unfavourable currency moves.

But the shares of the African biggest mobile phone operator soared after it kept a dividend.

The telco agreed to pay a fine of N330bn ($1.1bn), reduced from $5.2bn, in June last year after a prolonged legal battle to end a dispute over missing a deadline to cut off unregistered SIM cards.

The fine by Nigeria, MTN’s most lucrative, wiped 10.5 billion rand ($768m) – 500 cents per share – from the firm’s 2016 headline earnings, South Africa’s main measure of profit, Reuters reported.

But MTN shares rose nearly 10 per cent after the mobile network operator said it would pay a total dividend of 700 cents a share despite the loss, compared with 1,310 in 2015.

MTN also said it expected to keep it at 700 cents in 2017.

“They indicated that they will sustain a dividend of 700 cents, which investors see as positive,” a trader at Avior Capital Markets, Mark Hodgson, said.

MTN said its headline loss came in at 1.4 billion rand ($108m) or 77 cents per share last year, with headline earnings of 13.6 billion rand, or 746 cents per share, in 2015.

MTN woes in Africa’s most populous nation and biggest economy still persist, with the company facing an investigation by Nigerian lawmakers for allegedly repatriating $14bn illegally between 2006 and 2016.

MTN has denied any wrongdoing.

Founded with Pretoria’s help in 1994, MTN is seen as one of post-apartheid South Africa’s biggest commercial successes but clashes with regulators in recent years have exposed governance issues and hobbled growth, according to the report.

MTN, which has operations in Iran, said it expected to add 8.3 million new users in the 2017 financial year, a document handed out at its results presentation showed.

The firm said its total subscribers increased by 3.3 per cent or 7.7 million to 240 million in the year to end-December.

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