MTN Group Returns to Profit in 2017 -- Update
By Alexandra Wexler
JOHANNESBURG--South Africa's MTN Group Ltd. (MTN.JO) Africa's largest telecommunications company, returned to profit in 2017 due in part to higher data usage across the continent, though earnings continue to be weighed down by challenging regulatory and economic environments across Africa.
The Johannesburg-based telecom giant reported a profit of 4.41 billion South African rand ($371.9 million) during the 12 months ended Dec. 31, from the company's first-ever full-year loss of ZAR2.61 billion in 2016, in line with previously announced guidance. Performance in Nigeria, Uganda, Ghana and Ivory Coast was strong, the company said.
Basic headline earnings, the company's preferred measurement that strips out certain exceptional and one-off items, were ZAR1.82 a share, compared with a loss of ZAR77 cents a share a year earlier, also in line with previously announced guidance. Shares on the Johannesburg Stock Exchange are down 10% this year, and up 1% over the last 12 months.
Group data revenue increased 19% to ZAR28.21 billion from 2016, as more subscribers become active data users. MTN declared a second-half dividend of ZAR4.50 a share, the same as 2016. The total dividend for 2017 will be ZAR8.00.
Generally weak macroeconomics, hyperinflation and losses from a loan to a Nigerian tower company weighed down results, MTN said. Operations in Cameroon were negatively impacted by a data-network shutdown in some parts of the country in the first quarter, as well as regulatory and operational challenges, the company said.
Revenue was down 10% at ZAR132.82 billion, as total subscribers fell 9.7% to 217.2 million across MTN's markets, in part due to disconnections of lines that didn't comply with local registration laws.
One risky market has recently paid off, as the company managed to repatriate ZAR6.51 billion in dividends from its Iran operations, after repatriating ZAR6.3 billion in 2016 for a loan repayment.
However, MTN 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, 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 ($908.6 million) over three years. The remaining balance is ZAR6.6 billion, MTN said. The company also said it plans to list the Nigerian unit separately sometime this year.
MTN's debt rose to ZAR57.15 billion at the end of 2017 from ZAR51.90 billion at the end of 2016.
Write to Alexandra Wexler at firstname.lastname@example.org
(END) Dow Jones Newswires
March 08, 2018 03:41 ET (08:41 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.