Fidelity bank banner Bayelsa State banner
MTN profits dive 51 percent as tough times bite

By News Express on 04/03/2016

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 1,772


Profits for MTN, Africa’s largest mobile operator, plunged 51% last year as it battled poor economic conditions in SA, a stiff fine and regulatory hurdles in its largest market, Nigeria, and changes in its top team.

But the share price spiked 9% on Thursday, even though it closed lower, driven by the R8.30 per share dividend it declared.

That took the total dividend for the year to December to R13.10. Investors were expecting a much lower number for the second half of its financial year.

The dividend accounted for about 85% of yesterday’s share price gain, said an analyst.

But MTN cautioned that the dividend for this financial year could be lower because of uncertainties over the $3.9bn fine slapped on it by Nigerian regulators.

Depending on the amount the group will pay in penalties and whether there is improvement in operating conditions, the dividend may be increased.

It may announce a new CEO during the second quarter of this year and has hinted on listing its Nigerian unit.

Executive chairman Phuthuma Nhleko said the new CEO should be able to tackle the company’s current situation – where it operates and the evolution of the businesses, among other matters.

Yesterday, it also offered some insight into the challenges it faces in Nigeria over customer registration. MTN Nigeria and rivals were expected to be “home affairs (departments) and network operators all in one,” Mr Nhleko said.

The operator has beefed up its resources including putting more agents on the ground, and has improved its systems to reduce errors when the numbers are verified by the regulator.

The “situation is incredibly complex,” said Mr Nhleko.

Customer-registration legislation in Nigeria has been evolving and that has created problems in the industry, especially over biometry standards and requirements.

The poor performance in Nigeria has seen the unit lose market share, which fell to 44% from 49% in 2014. It had also dragged down overall performance. Group revenue remained flat at R146.3bn.

Mr Nhleko said last year was “an exceptionally difficult year for the company.”

Despite the regulatory and operational problems, MTN would continue to look for acquisitions that were likely to be in the digital space.

It has set aside $600m towards settling the fine imposed by Nigerian authorities, a possible indication that it was expecting a reduction.

The group was slapped with the fine for missing a deadline to cut off 5.1-million subscribers who had not registered their SIM cards as required by law.

Last month, it announced a $250m “good faith” payment to the Nigerian government, as it continued out-of-court talks with the regulator.

MTN Nigeria’s competitiveness was compromised by the suspension of regulatory services in October, it said. The regulator withdrew approval for new tariff plans and promotions until offers linked to a “dominant operator” ruling were removed from the market. MTN is deemed to be a dominant operator in Nigeria.

Currency movements also had an effect on MTN as the naira weakened against the dollar. “We are, however, establishing contingency plans to ensure we can continue with the planned network rollout,” it said.

Mvunonala’s chief investment officer Maqhawe Dlamini said of concern was the earnings before tax, depreciation, amortisation, interest and goodwill impairment losses margin, particularly in Nigeria.

While the market share loss was partly regulatory driven, “the reversal of this trend will be very tough to achieve as competition like Etisalat have been attracting customers through better network quality that will allow them to retain these new customers,” he said.

MTN increased total subscribers by 4.1% to 232.5-million.

JM Busha’s head of equities Farai Mapfinya said the results were quite disappointing, but fairly in line with expectations.

“The Nigerian fine and deteriorating economy had a huge impact on reported numbers, but we also anticipated and witnessed a whole host of cracks across the business that needs management’s remedial action, which we believe is under way,” he said.

Matthew Auerbach of Capricorn Fund Managers said the overall performance was disappointing.

“A telco (telecoms firm) should be a stable company where earnings should seldom fall more than 10%.”

Data revenue rose 30,2% to R33.8bn. MTN plans to spend R31bn this year, slightly up from the R29.1bn spent last year. Of this year’s investments, 36% will go to Nigeria, where it expects to add 4-million subscribers.

The bulk of its investments will go towards improving network quality and coverage. In addition to SA, MTN also aims to roll out fibre-to-the-home in Nigeria, Ghana and Iran this year.

MTN is targeting 12.5-million new customers from all its operations.

MTN SA showed strong improvement despite industrial action in the first half of the year.

In Iran, MTN said the continued easing of sanctions and its “related economic uplift offers significant opportunities to expand services, particularly in the digital space.”

It aims to repatriate some of its cash of R15.8bn from MTN Irancell during the first half of this year. (Business DAY, South Africa)

•Photo shows MTN Executive chairman Phuthuma Nhleko.

Source News Express

Posted 04/03/2016 3:23:36 PM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
11 million Boko Haram survivors in desperate need...

Okowa signs bill prohibiting extortion on land

Enugu Gov. assigns portfolios to commissioners, advisers

TODAY’S WEATHER FORECAST, By the Nigerian Meteorological Agency...

Conte questions Mourinho’s sanity

2015: Group warns Ex-Akwa Ibom PDP chair against...

FG using Amaechi, Ngige and Onu to sabotage...

NAF acquires 30 aircraft, activates 13 in 3...

Govt. hails Airtel on Africa U-17 Soccer Championship...

Real face Atletico, Juve get Monaco in European...

How to resolve controversy over alleged missing oil...

Peter Obi’s govt. not anti-Labour

 

Latest News 2019: Atiku, Tambuwal, Saraki, Jang, others cross first hurdle Ohanaeze sabotaging Igbo interests — IPOB •Attacks Uwazuruike and South-East Governors Lagos APC: Controversy trails Sanwo-Olu’s alleged withdrawal Journalist sentenced to 5,000 years in prison laments ordeal 2019 Presidency: PDP may drop aspirants with graft cases FIRS to block bank accounts of 6772 corporate tax defaulters APC mulls automatic tickets for National Assembly members We’re still being kidnapped, Igbo traders in Cross River cry out FG recalls Paris Club refund for 5 states •The affected states Osun Guber Poll: Declare PDP winner to avert national crisis, Secondus tells INEC •Cries blue murder Salary Arrears: Bayelsa Government assures workers of full payment Akwa Ibom royal fathers reiterate support for Governor Emmanuel

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (397,064 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (377,034 views) Shameless Genevieve Nnaji exposes breasts in public (308,894 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (250,848 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (232,550 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (221,773 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (200,297 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (181,819 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (165,960 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (163,503 views) Lagos plane crash: Journalist releases victims’ names (158,323 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (147,017 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (63) Business & Economy (3,628) Business Verdict (52) Columnists (933) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (547) Features (653) Global Business Monitor (301) International (2,434) Interview (165) Live Commentary (28) Love Matters (144) News (39,129) Opinion (1,111) Pidgin (11) Politics (6,747) Religion (873) Sports (1,706) Stock Watch (34) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

Anthony Joshua vs Alexander Povetkin: Highlights

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement