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MTN Group Swings to First Ever Full-Year Loss

2 Mar 2017 5:52 am
   By Alexandra Wexler 

JOHANNESBURG--South Africa's MTN Group Ltd. (MTN.JO), Africa's largest telecommunications company, swung to a fiscal year loss for the first time ever in 2016, due to ongoing repercussions from a massive regulatory fine in Nigeria and foreign-exchange losses in many of its markets.

The Johannesburg-based telecom giant swung to a loss of 2.61 billion South African rand ($199.5 million) from a year-earlier profit of ZAR20.2 billion, in line with previously announced guidance.

MTN called 2016 "the most challenging year in the company's 22-year history, precipitated by a number of material regulatory, macroeconomic and political challenges experienced across our regions."

The basic headline loss per share, the company's preferred measurement which strips out certain exceptional items, was ZAR77 cents compared with year-earlier earnings of ZAR7.46 a share, which was also in line with previously announced guidance.

Revenue was up 0.6% at ZAR147.92 billion and total subscribers rose 3.3% at 240.4 million across MTN's 22 markets. The company declared a second half dividend of ZAR4.50, down 46% from the same period in 2015. The total dividend for 2016 will be ZAR7.00.

MTN managed to repatriate ZAR6.3 billion from its Iran operations, which it said was the entire amount due under the loan advanced for its license fee in 2005.

However, the company continues to incur costs related to a massive regulatory fine in Nigeria. In October 2015, the Nigerian Communications Commission fined MTN's Nigerian unit $5.2 billion, or roughly a quarter of the country's federal budget, alleging that MTN missed a deadline to deactivate more than 5 million unregistered SIM cards under regulations meant to combat terrorism. In June 2016, the company said it had agreed to pay a fine of 330 billion naira ($1.67 billion) over three years.

Write to Alexandra Wexler at alexandra.wexler@wsj.com

(END) Dow Jones Newswires

March 02, 2017 00:52 ET (05:52 GMT)

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