Leading continental telecoms giant, South Africa’s MTN, Thursday decried that it made a $200 million loss in 2016; the company’s first ever in a number of rising financial years.
However, the company traced the misfortune to the huge fine in Nigeria and currency challenges in key markets.
Analysts say the not so good result would have further provided grounds for deferring the proposed listing of MTN Nigeria on the Nigerian Stock Exchange (NSE) come September, but for the reason that it was part of the deal leading to the reduction of the fine slammed on it by the Nigerian regulator, the NCC for breaches on deactivation of unregistered SIM card.
In a statement, MTN said “MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history:.
MTN reported profits of 20.2 billion rand ($1.6 billion) before tax for 2015.
More details show that the overall performance was hindered by lower than expected growth in both South Africa and Nigeria — as well as the depreciation of the rand against the dollar and the continued impact of a $1 billion (950 million euros) fine by Nigerian authorities.
Nigerian authorities fined MTN in October 2015 for failing to disconnect unregistered mobile accounts in the country — originally ordering it to pay $1,000 for each improperly registered SIM card.
The original Nigerian Communications Commission (NCC) penalty was equal to roughly a quarter of the country’s annual federal budget.
Nigeria, Africa’s most populous country, is MTN’s largest market, where it now has 62 million subscribers out of a total of 233 million — a 1.2 percent increase on 2015.
MTN’s operations in South Africa were hit by technical issues and customer service problems during the year, which also hurt the bottom line, the company said.
The statement added that “Towards the end of 2016 our two largest operations (South Africa and Nigeria)… began to show signs of a turnaround following an extended period of underperformance.”
Revenue was fractionally up for the year at 146.9 billion rand ($11.3 billion, 10.7 billion euros), the company said.
But the MTN share price on the Johannesburg stock exchange rose five percent after the announcement of the company results compared to the close on Wednesday.
For more than one year now, the company had been getting ready to list on Nigerian Stock Exchange (NSE) but had tied the feat to observable signs of recovery any time soon.
