MTN Group Ltd. fell in Johannesburg trading as Africa’s largest mobile-phone company said it expects to report a first-half year loss after agreeing to pay a record fine in Nigeria. The shares dropped 2.5 percent to 138.13 rand after earlier slumping as much as 3.8 per cent, the most in three weeks on a closing basis. The N330 billion ($1.18 billion) settlement in Nigeria, announced in June, will reduce earnings per share for the six months through June by 4.74 rand, while foreign-exchange losses, joint ventures and adjustments for inflation in Iran will further hurt results, MTN said in a statement yesterday. MTN is seeking to turn the page on a dispute with the Nigerian government, which initially imposed a $5.2 billion fine after the company missed a deadline to disconnect unregistered users.
Convincing investors
Johannesburg-based MTN is overhauling senior management and has added new directors as it seeks to convince investors the penalty won’t be repeated and revive a share price that’s 36 per cent lower than a year ago. Earnings were also damped by under performance in MTN’s two largest markets, it said. Nigerian results were further weighed on by government-mandated subscriber disconnections and a temporary withdrawal of regulatory services, while profit margins in South Africa were narrowed by an increase in handset sales. The loss would be the first over any half-year period for at least 20 years. MTN, which reported earnings per share of 6.53 rand for the same period a year earlier, said it will issue a further statement once it’s ready to provide more detail about the projected loss. The final results will be announced on August 5th .
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