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MTN Nigeria profit a quarter of pending fine

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 20 Jan 2016
MTN is yet to finalise its 2015 financial results but says profit after tax of around R16 billion for its Nigerian operations "is within the current estimate".
MTN is yet to finalise its 2015 financial results but says profit after tax of around R16 billion for its Nigerian operations "is within the current estimate".

MTN's profit for its Nigerian business looks set to come in at way below the amount the telco is being asked to pay in a fine from the Nigerian Communications Commission (NCC).

MTN has confirmed the around 190 billion naira (R16 billion) profit amount quoted by Nigerian publication, This Day, "is within the current estimate" for the mobile giant's Nigerian profit after tax for the year ended 31 December 2015.

MTN made it clear in a statement issued on SENS that the profit amount is still "subject to finalisation and audit sign off" and that shareholders should exercise caution when reacting to information which has not been released by the operator.

"The company is in the process of completing its audit and its financial results are yet to be finalised," according to MTN.

The current estimated profit is still less than a quarter of the $3.9 billion (R65.7 billion) fine the mobile operator is facing in Africa's biggest economy. MTN is currently engaging in a court battle with the NCC over the penalty that was issued when MTN failed to disconnect 5.1 million unregistered SIM cards on its Nigerian network by the NCC's deadline.

MTN's latest quarterly update, for the third quarter ended 30 September 2015, showed the telco has 62.5 million subscribers in Nigeria, which is the telco's biggest market. Overall, the MTN group has 233 million subscribers across 22 countries in Africa and the Middle East ? 29.1 million of which are in South Africa.

MTN's full year revenue for 2014 in Nigeria was close to R54 billion, while the entire MTN group's profit after tax for the 2014 financial year of R37.7 billion, still falls short of the pending fine.

The company's share price has been in steady decline since the mammoth fine was announced in October last year.

At the time, MTN stock was trading at around R190 per share on the Johannesburg Stock Exchange. At yesterday's close, the stock was valued at R120.05 per share, and in early trade this morning had fallen further to around R117 a share. MTN shares have fallen around 38% in the past 12 months.

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