MTN warns profits to fall sharply - TechCentral

MTN warns profits to fall sharply


MTN’s headline earnings per share (Heps) for the year ended 31 December 2015 will fall by at least 20%, the JSE-listed telecommunications group warned investors on Thursday after markets closed.

The group has blamed operational challenges in Nigeria, as well as other, unspecified issues, for the sharp decline in Heps.

MTN will publish its annual results in two weeks’ time, on 3 March.

The group has been fined US$3,9bn by the Nigerian Communications Commission for failing to disconnect more than 5m unregistered Sim cards in the West African nation.

“Given the ongoing discussions taking place with the Nigerian authorities, there remains some uncertainty as to the final quantum of the Nigerian fine, should an out-of-court settlement be reached,” MTN told shareholders.

“Notwithstanding the uncertainty of the outcome of the various engagements relating to the fine, shareholders are advised that, excluding the fine, the company is expecting to report a decrease of at least 20% in basic Heps, which equates to a reduction of at least 307c for the year ended 31 December 2015 when compared with the previously reported Heps of 1 536 cents.

“The negative earnings performance has been impacted by a number of factors, with the operational underperformance in Nigeria, resulting from the subscriber disconnections and the withholding of regulatory services, being a key contributor to this,” it said.

The profit warning comes after MTN’s share price rose by more than 40% from its 52-week low of below R110/share in January. MTN closed on Thursday at R153,70/share, a gain of 1,1% on the session.

MTN said it will issue a further trading statement “as soon as there is a reasonable degree of certainty as to the likely range within which the company’s Heps is expected to decrease”.  — (c) 2016 NewsCentral Media

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