MTN dips into the red for first time during 1H16

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MTN slipped into the red during the first half of 2016 as the operator took a one-off hit relating to the settlement of an NGN330 billion (€933 million/$1.03 billion) regulatory fine issued in Nigeria.

The South-Africa headquartered operator generated a net loss of ZAR6.2 billion (€410 million/$454 million) in the opening half of 2016, compared to a profit of ZAR13.8 billion in the same period of 2015. The loss is the first in MTN’s history as a publicly traded company, Bloomberg noted.

MTN blamed the bulk of the decline on provisions made to settle the Nigerian fine, which saw the operator pay off the first NGN80 billion in two separate payments during the opening half of the year.

MTN’s EBITDA fell from ZAR30.6 billion in the first half of 2015 to ZAR18.8 billion in the recent period. Excluding the Nigerian fine, first half 2016 EBITDA would have stood at ZAR29.3 billion, MTN’s earnings statement shows.

Reported revenue grew from ZAR69.3 billion in the first half of 2015 to ZAR79.1 billion in the recent period, as MTN grew sales in all but two of its operating markets. The greatest gains in revenue came from data services, which was up 32.2 per cent year-on-year at ZAR19.8 billion, and devices, which great 33.7 per cent annually to ZAR3.8 billion.

Outgoing voice services remained MTN’s largest contributor to overall revenue on 56.7 per cent, with data sales the second largest on 25.2 per cent. The company noted that it increased data revenues despite a “continued reduction in data pricing as a result of competition.”

Despite the decline in earnings, MTN’s share price actually lifted when news of its first half earnings broke, Bloomberg reported. The news agency noted that stock markets had already reacted to MTN’s plan to book the Nigerian fine in its first half earnings, leaving the door open for a recovery when the actual figures were known.

For more:
- see this MTN announcement
- view the operator’s full earnings statement (PDF)
- see this Bloomberg report

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