South Africa mobile operator MTN to swing back into profit

MTN expects to swing back into profit in the first half of its financial year after a 330 billion naira ($1.1 billion) fine paid in the previous reporting period weighed on margins, the company said on Thursday.

Africa’s biggest wireless network group expects headline earnings per share (HEPS) to be between 210 cents and 230 cents for the six months ended 30 June 2017 compared to a headline loss per share of 271 cents in prior comparable period.

HEPS is the main profit measure used in South Africa that strips out once off items.

“The negative performance in the prior comparable period was mainly as a result of non-recurring costs, including the Nigeria regulatory fine of 474 cents per share,” the company said.

MTN agreed to pay the fine, which was reduced from $5.2 billion, in June last year after a prolonged legal battle to end a dispute in Nigeria over missing a deadline to cut off unregistered SIM cards.

The fine claimed by Nigeria, MTN’s most lucrative but increasingly problematic market, wiped 10.5 billion rand ($814.67 million) from 2016 earnings.