S.Africa’s MTN earnings miss as forex rates bite
African telecoms giant MTN on Wednesday reported weaker than expected earnings, as currency fluctuations bit into the South African company's bottom line.
Revenue jumped nearly 10.9 percent in 2012 to 135 billion rand ($15 billion), but headline earnings per share increased just 1.9 percent to 10.89 cents from 10.69 cents.
The mobile giant operates in 22 African and Middle Eastern countries, and now has 189.3 million customers, up over 15 percent.
The company said foreign currency losses in markets like Iran and Syria resulted in the bottom line shrinking and a marginal profit according to adjusted earnings.
It has been a tough year for the South Africa-based firm, fending off graft allegations linked to Iran and increasingly competitive mobile markets.
“The year was characterised by the continued global economic slowdown, increasingly competitive mobile markets as well as regulatory and political challenges,” the firm said in a statement.
The telecoms giant is facing a $4.2 billion lawsuit in a US court for allegedly bribing officials to receive its Iranian licence, which had initially been awarded to rival Turkcell.
“MTN continues to vigorously defend the US proceedings, and expects that the US Court will decide its motion to dismiss such proceedings in the second half of 2013,” the company said.
Despite having 47.4 million subscribers in Nigeria, there the company had a “difficult year,” posting an 0.8 percent drop in revenue, due to “significant tariff declines amid heightened competition.”
However, the operation registered strong growth in Blackberry subscriber revenues.