Shares in MTN tumbled more than 19 per cent on Friday after the emerging markets mobile phone operator warned that its earnings fell by at least 20 per cent last year.
The South African group said earnings had been hit by a number of factors, with “operational underperformance in Nigeria”, its biggest market, stemming from subscriber disconnections and the withholding of regulatory services.
MTN has been locked in a months-long dispute with Nigerian authorities over a $5.2bn fine imposed against it for its failure to meet a deadline to disconnect 5.1m unregistered sim cards in the west African nation.
The fine, which was revealed in October, was later reduced to $3.9bn, but MTN is still negotiating with Nigerian authorities in an attempt to reach a better settlement.
The telecoms group has engaged Eric Holder, the former US attorney-general, to help with its negotiations.
In a statement to the Johannesburg Stock Exchange, the mobile operator said: “There remains some uncertainty as to the final quantum of the Nigerian fine, should an out-of-court settlement be reached.”
MTN said that, excluding the fine, it expected to report a decrease of at least 20 per cent in basic headline earnings per share, which equates to a reduction of at least 307 cents for the year ended December 31 2015. This compares with 1,536 cents reported in 2014.
The company will announce its full-year results on March 3.
The Nigeria fine has cast a huge cloud over the group, damaging the image of one of Africa’s top brands, raising questions about its corporate governance and attracting criticism from investors, who have complained of a lack of information from the company.
The saga triggered the resignation of its chief executive, Sifiso Dabengwa, and a reorganisation of MTN’s management structure.
Phuthuma Nhleko, MTN’s chairman and a former chief executive, has since taken on an executive role as the company seeks to resolve the dispute
