MTN looking to the longer term

MTN chairman Phuthuma Nhleko. File picture: Simphiwe Mbokazi

MTN chairman Phuthuma Nhleko. File picture: Simphiwe Mbokazi

Published May 25, 2016

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Johannesburg - MTN said organic revenue gained 1 percent in the four months through April as regulatory pressure in Nigeria led to falling sales in the South African phone company’s biggest market.

The performance was also impacted by lower revenue growth in Uganda and Cameroon, the Johannesburg-based company said in a statement on Wednesday.

Read: How MTN, an African success story, faltered

The margin on earnings before interest, taxes, depreciation and amortisation remains “under pressure”, the wireless operator said.

“We expect the group’s performance to be impacted by the weak macro environment in key markets as well as by tough competition,” Chairman Phuthuma Nhleko said in the statement, which he will read out to shareholders at MTN’s annual meeting later on Wednesday. “We, nevertheless, remain confident about the longer term prospects of the countries in which we operate.”

MTN’s business in Nigeria came under pressure last year as regulators withdrew services and levied a record $3.9 billion fine on the company for missing a deadline to disconnect subscribers. The stock is down about 31 percent since the penalty was made public in October, and traded 2.1 percent higher at R130.77 as of 9.27am in Johannesburg on Wednesday.

“We continue our engagement with the Nigerian authorities and are awaiting feedback,” Nhleko said.

“We remain optimistic on reaching a conclusion on this matter in the short term. We will continuously monitor developments with regards to the Nigerian fine and will review the adequacy of the provision at the end of the reporting period.”

BLOOMBERG

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