South Africa’s MTN cuts dividend after reporting $357m loss

Africa’s biggest mobile phone operator MTN Group Ltd reported a $357 million half-year loss on Friday and cut dividend payouts, after a hefty regulatory fine in Nigeria and underperformance in its South African home market.

Founded with the South African government’s help after the end of apartheid in 1994, MTN agreed in June to pay a 330 billion naira ($1.05 billion) fine in a settlement with Nigerian authorities for missing a deadline to cut off unregistered SIM cards from its network.

MTN said the fine, a third of the initial penalty, wiped off 10.5 billion rand, 474 cents per share, from headline earnings, South Africa’s main measure of profit that strips out certain one-off items.

MTN’s headline loss came in at 4.9 billion rand ($357 million), or 271 cents per share, in the six months to end-June.

This compared with headline earnings of almost 12 billion rand, or 654 cents per share, a year earlier.

The company, which has more than 230 million subscribers, cut its dividend by almost 50 percent to 250 cents per share for the half year.

MTN has said its Nigerian business would pay the fine in local currency. The penalty was worth $1.7 billion when it was announced, but the naira has fallen sharply since then, cutting the equivalent dollar value by about $500 million.

The company also said the results were affected by unfavourable currency swings, underperformance in its home market and in Nigeria, where it had to cut off another 4.5 million SIM cards to comply with the local regulator’s user registration requirement.