MTN declines despite earnings rise


MTN declines despite earnings rise

Published Date: 2019-02-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

MTN declines despite earnings rise

Analysts said clearer guidance was needed from the network operator after the disappointing results of the previous couple of years.

MTN's share fell yesterday despite the network operator guiding the market to expect strong earnings growth for the year to end-December.

In a trading update, MTN said both headline and attributable earnings per share would increase by at least 20% for the year, from the respective levels of 182c and 246c per share reported in 2017. Analysts tweeted that clearer guidance was needed, with expectations for a rise of up to 215% for the year from the low base set in previous years.

MTN has been beset by problems, including mammoth penalties in Nigeria. In October 2015, it was hit with a $5.2 billion fine, later reduced to $1.7 billion, after it failed to meet a deadline to disconnect users with unregistered SIM cards. That resulted in the group reporting a loss for its 2016 financial year .

In December, it reached a settlement with the Central Bank of Nigeria (CBN) over $8.1 billion in dividends it was alleged to have repatriated to South Africa without following proper procedures. The network operator will pay N19.2 billion, equal to $52.6 million or about R777 million, to settle the matter without admission of liability.

The group still faces a $2 billion tax demand from Nigeria's Attorney General, which is set to go before that country's courts this month. The Attorney General alleges MTN underpaid taxes on imported equipment and payments to foreign suppliers over the past 10 years.

Last month, shares in rival Vodacom fell sharply after it reported weaker revenue from its SA operations for the three months to end-December.

MTN said it would issue a further trading statement once it had a clearer sight of last year's earnings. Its shares closed 2.5% down at R85.86.

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