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Blog: 27 February 2017 (MTN to report a loss per share largely due to the fine it received in Nigeria and exchange rate losses)

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We take a look at MTN's updated trading statement for year ending 31 December 2016. It was a shocker for MTN and their results shows it. Below we take a look at the trading statement as well as supply readers with out Interactive Candle Stick Chart for MTN. 

• MTN

MTN shareholders and it's share price taking shots

The candlestick chart below of MTN's share price is interactive and allow users to change the colours of the graph, edit the graph with lines and comments, save the graph as image after it has been edited and it allows users to download the data used to develop the graph. The graph also automatically calculates MTN's share price performance based on the data range selected by the user.

Red Faded Red Green Lime Blue Arctic Blue Turquoise Orange Purple Gray Pink Brown Black

Percent change:

MTN trading statement for 27 February 2017

UPDATE ON TRADING STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016

MTN is currently in the process of finalising its financial results for the year ended 31 December 2016 (“FY2016”) which will be announced on the Stock Exchange News Service of the JSE Limited on Thursday, 2 March 2017. Following the trading statement published on 8 February 2017, shareholders are further advised that MTN expects to report for FY2016 a basic headline loss per share of between 74 cents and 81 cents and a basic loss per share of between 137 cents and 151 cents. In the prior year comparable period MTN reported headline earnings per share of 746 cents and earnings per share of 1 109 cents.

The results for the year were impacted by the Nigerian regulatory fine, which had a 455 cents per share (cps) negative impact. In addition, the results were negatively impacted by the following:
- Foreign exchange losses (324 cps);
- The ‘interest unwind’ related to the Nigerian regulatory fine (45 cps);
- The MTN Zakhele Futhi BBBBEE transaction charge (88 cps);
- Professional fees related to the settlement of the Nigerian regulatory fine(73 cps);
- Losses from our investments in Digital Group being mainly Africa Internet Holdings (AIH), Middle East Internet Holdings (MEIH) and Iran Internet Group (IIG) (39 cps);
 Hyperinflation impact(37 cps); and
- Losses from the Nigeria tower company mainly as a result of foreign exchange losses on US dollar denominated loans (122 cps); (following MTN exchanging its interest in the Nigeria Tower Company for the increased stake in IHS Holding this investment will be shown as “an asset available for sale”). 

So from R7.46 per share profit for end of 2015 financial year, MTN shareholders can now expect a 84c loss per share. With the majority of the loss being driven by the fine imposed by Nigerian authorities due to MTN's failure to disconnect SIM cards that was not as we in SA know it RICA properly. Readers might be wondering why Nigeria has such a big influence over MTN's results. Well below the graphic shows the revenue and pre tax profits from some of MTN's biggest markets.

As can be seen from the pie charts above, Nigeria contributes a very large percentage of MTN's turnover and pre tax profits, thus if MTN Nigeria sneezes the rest of MTN gets a cold. MTN operates in a few very volatile markets such as Iran, Nigeria, Ghana etc. and while these markets are extremely lucrative they do however contribute to the volatility of MTN's earnings.

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• ​MTN