Telecom giant MTN shares fall on profit warning
Shares in South African telecoms giant MTN fell almost 18 percent Friday after the company said 2015 earnings dropped by at least 20 percent.
The share price fall was the biggest since April 2000, as the company fights a $3.9 billion fine imposed by Nigerian authorities last year for failing to disconnect unregistered users.
By midday, stocks of the Johannesburg-headquartered company were trading at 126.25 rand after closing the previous day at 153.70 rand.
On Thursday, MTN advised shareholders that "the company is expecting to report a decrease of at least 20 percent in basic headline earnings per share".
The company will announce its full year financial results on March 3.
"The negative earnings performance has been impacted by a number of factors with the operational underperformance in Nigeria resulting from the subscriber disconnections," said a statement.
Nigeria, Africa's most populous country, is the MTN group's largest market, where it had more than 62.8 million subscribers by the second quarter of 2015.
MTN was slapped with the hefty penalty in October 2015 after it missed a deadline to disconnect 5.1 million unregistered SIM cards.
Negotiations over the amount are underway and "there remains some uncertainty as to the final quantum of the Nigerian fine", MTN said.
But it noted that the fall in earnings per share excludes the fine.
The Nigerian Communications Commission said registration of subscribers was made mandatory to ensure proper identification of users with their biometric data and in line with international best practice.
The fine led to the resignation of chief executive Sifiso Dabengwa and other Nigerian executives.
MTN operates in 22 countries in Africa and the Middle East.
© 2016 AFP