Johannesburg – MTN, Africa’s
largest mobile operator by subscribers, has reported its first ever loss of 77c
a headline share.
This comes despite a 3.3 percent
increase in subscribers to 240.4 million. However, MTN has reviewed the company
and has identified measures to deliver on its strategy.
MTN also noted on Thursday that
its earnings before interest, tax, depreciation and amortisation for the year
to December declined 13.2 percent to R51.98 billion as revenue increased
marginally by 0.4 percent to R146.9 billion.
The listed company, with
operations in Africa and the Middle East, notes its results “reflect the most
challenging year in the company’s 22-year history, precipitated by a number of
material regulatory, macro-economic and political challenges experienced across
our regions”.
Despite
these difficulties, the business began to show encouraging first signs of a
turnaround, it says.
MTN’s
results were impacted by several factors, including once-off costs, which
affected its operating profit.
These
included the Nigerian regulatory fine of R10.5 billion, professional fees
related to the settlement of the Nigerian regulatory fine of R1.3 billion, MTN
Zakhele Futhi share-based payment expense of R1 billion, the impairment of
property, plant and equipment in South Sudan of R295 million, and Project
Winback, relating to the reconnection of subscribers in Nigeria of R530 million.
Excluding
the impact of hyperinflation and the relating goodwill impairment, tower
profits, the Nigerian regulatory fine and the MTN Zakhele Futhi share-based
payment expense, its operating profit declined 13.2 percent.
Headline
earnings per shares, which were 110 percent lower, were impacted by the
regulatory fine, which had a negative 500c impact, as well as foreign exchange
losses of 329 cents; losses from MTN’s 51 percent equity interest in Nigeria
Tower of 122 cents mainly as a result of unrealised foreign exchange losses on
US dollar-denominated loans, the MTN Zakhele Futhi impact of 88 cents; professional
fees related to the settlement of the Nigerian regulatory fine of 73 hyperinflation
of 37 cents and losses from its investments in Digital Group, mainly including
Africa Internet Holdings (AIH), Middle East Internet Holdings (MEIH) and Iran
Internet Group (IIG) of 39 cents.
Read also: MTN to report first ever loss
The
group, which repatriated R6 308 million (€425 million) from MTN Irancell
up to December 31, also refinanced maturing facilities and secured additional
long-term financing facilities from local and international sources to fund
capital expenditure and working capital.
However,
MTN says all is not lost.
After
the settlement agreement, the infusion of new senior management, its board has
undertaken a “deep and fundamental strategic review” of the business and its
processes to ensure MTN is operating far more optimally in a complex and
difficult operating environment.
“The
outcome of this review illuminated areas of the business which required urgent
attention. It also highlighted the company’s unique position in a fast moving
industry. As a result, the company embarked on a transformation initiative,
IGNITE, designed to optimise its operations and position the group most
favourably to participate in a rapidly evolving sector.”
MTN
will focus on four key areas:
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Its
transformation initiative (IGNITE);
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Accelerating
the growth of new revenue streams;
-
Finalising
the appointment of senior management; and
-
Including
a more diverse skill set on the board.
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