MTN expects to fall deep into the red on Nigerian fine
JSE-listed telecommunications giant MTN expects to swing to a loss during the six months ended June 30 as its multibillion-dollar settlement arrangement with the Nigerian government eats into profits.
MTN, which will publish its interim financial results on Friday, expects to report a basic headline loss a share of between 255c and 285c for the six months under review, a significant decline on the headline earnings a share of 654c in the prior corresponding period.
A basic loss a share of between 285c and 315c is anticipated for the first half of 2016, compared with the earnings a share of 653c reported in the first half of last year.
The losses are mostly the result of the 474c a share impact of the Nigerian Communications Commission penalty, exacerbated by 135c a share in foreign exchange losses.
Further, losses from tower companies slashed 136c a share from earnings, with additional impacts emerging from increased short-term losses from the digital businesses, Africa Internet and Middle East Internet.
In addition, the underperformance of the Nigerian operations, a temporary withdrawal and subsequent reinstatement of regulatory services and the disconnection of 4.5-million subscribers has contributed to MTN’s interim losses, along with the relatively weaker operational performance of MTN South Africa, impairments on property, plant and equipment in South Sudan and goodwill impairments in Guinea Conakry and for Afrihost.
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