By Emmanuel Elebeke with agency report
Telecoms giant, MTN said it made a $200 million loss in 2016, the company’s first after suffering a huge fine in Nigeria and currency challenges in key markets.
A statement by the MTN Group on Thursday, indicated that its financial results for 2016 reflect the most challenging year in the company’s 22-year history.
According to the MTN Group, the company reported profits of 20.2 billion rand ($1.6 billion) before tax for 2015.
It further explained that overall performance of the company was hindered by lower than expected growth in both South Africa and Nigeria as well as the depreciation of the rand against the dollar and the continued impact of a $1 billion (950 million euros) fine by Nigerian authorities.
Nigerian authorities had in October 2015 fined MTN for failing to disconnect unregistered mobile accounts in the country originally ordering it to pay $1,000 for each improperly registered SIM card.
The Nigerian authorities had ordered the purge for security reasons, as the country battles Boko Haram Islamists as well as criminality especially kidnapping for ransom.
The original Nigerian Communications Commission penalty was equal to roughly a quarter of the country’s annual federal budget.
Nigeria, Africa’s most populous country, is MTN’s largest market, where it now has 62 million subscribers out of a total of 233 million, a 1.2 percent increase on 2015.
The Group said its operations in South Africa were hit by technical issues and customer service problems during the year, which also hurt the bottom line, the company said.
“Towards the end of 2016 our two largest operations (South Africa and Nigeria)… began to show signs of a turnaround following an extended period of underperformance.”
Revenue was fractionally up for the year at 146.9 billion rand ($11.3 billion, 10.7 billion euros), the company said.
It was also revealed that the MTN share price on the Johannesburg stock exchange rose five percent after the announcement of the company results compared to the close on Wednesday.