Nigeria’s $1.6 billion fine imposed on MTN has put severe pressure on the group’s financial performance. The fine was equivalent to about one third of MTN’s EBITDA in the six-month period.
The group said it “continued to operate in a challenging environment” for the period, and added: “The financial performance for the period reflects the confluence of a number of material issues, which created the ‘perfect storm’. The group has made strides towards resolving these challenges although many of these factors fall outside of its control.”
Apart from the Nigerian regulatory fine, the depreciation of local currencies against the US dollar had a substantial impact on the group’s results, said the company. This resulted in foreign exchange losses amounting to the equivalent of $263 million during the period. One of the main contributory factors to the 14% increase in group revenue was the movement in the exchange rate between the Nigerian naira and the South African rand.
The company reported “strong operational and financial performances” in its joint venture in Iran, MTN Irancell, and in MTN Ghana and MTN Cyprus. However there was a charge of $75 million incurred by MTN Irancell, “mainly relating to the depreciation and amortisation of hyper-inflated assets that were historically written up under hyperinflation reporting”, said MTN.
