MTN ends turbulent year by announcing first loss in 20 years

Mobile operator MTN has reported a headline loss of R1.4 billion ($108 million) or 77cents per share for the financial year ending 31 December 2016. The announcement was made at the release of their financial results on Thursday at the MTN Innovation Center in Johannesburg. This is the company’s first loss in 20 years.

The company stressed that these results should be taken within the context of the tough economic climate created by fluctuating and depreciating local currencies against the US dollar and the obvious knock that the company took on once off payments such as the $1.7 billion Nigeria fine.

The shift from voice to data was highlighted by the 1.7% drop in voice traffic and the 143% rise in data traffic, which resulted in a 16.7% increase, in data revenue.

Other factors which contributed to the overall headline loss include the decrease of 13.2% (R51.9 billion) in earnings before interest, tax, depreciation and amortisation (Ebitda).

“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.

“We are in a difficult market but we do believe that the recent disruption in emerging market regions in which we operate will tapper down. Despite these difficulties the business has began to show encouraging first signs of a turnaround.”

MTN’s share price rose by over 5% after the announcement despite their first ever recorded loss.

By Dean Workman