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MTN South Africa Records First Financial Loss In 20 Years

Mobile network MTN  said 2016 was its “most challenging” year ever as it reported its first annual loss in 20 years.

The company on Thursday reported a headline loss of R1.4bn ($108m), or 77 cents per share, for its financial year ended December 31.

This compared with headline earnings of R13.6bn, or 746c/share, a year earlier.

The company also reported that its earnings before interest, tax, depreciation and amortisation (Ebitda) decreased by 13.2% to R51.9bn.

Its Ebitda margin also decreased by 5.5 percentage points to 35.4%.

Revenue lifted marginally by 0.4% to R146.9bn, while its group subscribers increased by 3.3% to 240.4 million across Africa and the Middle East.

A glimmer of hope shone in its data revenue, which increased by 16.7% to R39.5bn.

“MTN Group’s financial results for 2016 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,” said the company.

“However, despite these difficulties, the business began to show encouraging first signs of a turnaround,” MTN added.

Nigerian continued to pose challenges for the company.

MTN further outlined factors weighing down on its business such as its Nigerian regulatory fine, which had a 500 cents negative impact on headline earnings per share (HEPS).

MTN further said its HEPS was negatively impacted by foreign exchange losses of 329 cents, and losses from MTN’s 51% equity interest in Nigeria Tower InterCo B.V. of 122 cents mainly as a result of unrealised foreign exchange losses on US dollar-denominated loans.

And in South Africa, MTN said it “delivered a sub-optimal result in the first six months of 2016, with network, systems and customer service challenges”.

Despite the negative news, MTN’s share price was up over 5% to R123.45 at 09:14 in Johannesburg.

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