MTN Targets 12.5 Million New Customers As Profit Down 51 Per cent

MTN

Challenges including regulatory hurdles in Nigeria, poor economic conditions in South Africa and changes in top management team have been linked to the 51 per cent fall in MTN’s profit for 2015 financial year.
Notwithstanding this fall, the firm reported a 4.1 per cent subscriber increase to 232.5 million with a fresh customer target of 12.5 million in the new year.

MTN said its share price spiked nine per cent on Thursday, even though it closed lower, driven by the R8.30 per share dividend it declared. That took the total dividend for the year to December to R13.10. Investors were expecting a much lower number for the second half of its financial year.
Bdlive.co.za, yesterday, reported and quoted an analyst, saying the dividend accounted for about 85 per cent of Thursday’s share price gain.
But MTN cautioned that the dividend for this financial year could be lower because of uncertainties over the $3.9 billion fine slapped on it by Nigerian regulators.
The firm is also looking at announcing a new CEO during the second quarter of this year and has hinted on listing its Nigerian unit.
Executive Chairman Phuthuma Nhleko said the new CEO should be able to tackle the company’s current situation – where it operates and the evolution of the businesses, among other matters.
MTN said it has beefed up its resources, including putting more agents on the ground, and has improved its systems to reduce errors when the numbers are verified by the regulator.
Its poor performance in Nigeria has seen the unit lose market share, which fell to 44 per cent from 49 per cent in 2014. It had also dragged down overall performance. Group revenue remained flat at R146.3 billion.
The group was slapped with the fine for missing a deadline to cut off 5.1 million subscribers who had not registered their SIM cards as required by law.
Last month, it announced a $250 million “good faith” payment to the Nigerian government, as it continued out-of-court talks with the regulator.
MTN Nigeria’s competitiveness was compromised by the suspension of regulatory services in October, it said. The regulator withdrew approval for new tariff plans and promotions until offers linked to a “dominant operator” ruling were removed from the market. MTN is deemed to be a dominant operator in Nigeria.
Matthew Auerbach of Capricorn Fund Managers said the overall performance was disappointing.“A telco (telecoms firm) should be a stable company where earnings should seldom fall more than 10 per cent.”
Data revenue rose 30.2 per cent to R33.8 billion. MTN plans to spend R31 billion this year, slightly up from the R29.1bn spent last year. Of this year’s investments, 36 per cent will go to Nigeria, where it expects to add four million subscribers.