BusinessDay
Nigeria's leading finance and market intelligence news report.

Nigerian fines to weigh on MTN Group’s 2019 profit growth

South African-based MTN Group on Tuesday said interest payments on regulatory fines in Nigeria will be among the factors that would slow its profit growth expected to be up to 50 percent in 2019.

MTN ahead of the full-year result disclosure in March said its headline earnings per share (HEPS) will fall between 438 cents to 506 cents based on the IFRS 16 accounting standard it recently implemented.

This would be slower than 85 percent growth year-on-year in 2018 as items outside its regular business, including interest on the Nigerian fines, foreign exchange losses and hyperinflation adjustments are expected to drag growth, MTN group told Reuters.

In Nigeria, a significant market for MTN, the Telco has faced a series of regulatory bumps over the years.

Last year, MTN paid the last and final part of an N300bn (less than $1 billion) fine for failure to disconnect unregistered lines from its network by the deadline stated by Nigerian Communications Commission (NCC) in 2015.

The initial fine was N1.04 trillion but was reduced after negotiations between MTN and Nigeria.

In 2018, MTN agreed to pay $53 million after Central Bank of Nigeria accused the Telco of not using the right channels to repatriate funds to South Africa.

The latest dispute for MTN has been a face-off with the Attorney General of Nigeria who demanded the Telco paid a back tax of N2bn.

Earlier in January the attorney general and MTN Group announced that the AGF had withdrawn its $2 billion tax demand against MTN Nigeria and referred the matter to the Federal Inland Revenue Service and Nigeria Customs Service.

Following the settlement with the AGF, MTN Group in a visit to President Buhari in Abuja committed to investing the sum of $1.6 billion in its operations Nigeria to strengthen its network and systems.

The Telco later said it is also preparing a Future Public Offering (FPO) which will see it raise up to N340 billion from domestic investors as it seeks to sell down its Nigerian stake.

Nigerian investors currently own about 19.4 percent of MTN Nigeria, while 78.8 percent is owned by South Africa’s MTN Group.

MTN Group announced the sale down of about  14 percent of its stake in MTN Nigeria which would reduce its ownership to around 65 percent Nigerian amid a wider $4bn asset-sale plan to focus its business on key growth regions.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.

Comments are closed.