MTN Group Ltd’s net income fell 7 percent without the huge fine imposed on it by Nigerian regulator as the company continues to grapple with a weak consumer base stoked by stuttering economy in major markets.
The audited financial statement of the South Africa company showed Earnings Before Interest Taxation Depreciation and Amortization (EBITDA) before Nigeria regulatory fine stood at RI 68.41 billion ($4.3 billion) compared with R73.20 billion ($4.70 billion) in 2014.
EBITDA after deducting Nigeria regulatory fine dropped by 19 percent to R59.12 billion ($3.94 billion) in December 2015 from R73.20 billion (4.80 billion) as at December 2014.
The company was fined $3.9 billion by the Nigeria Communication Commission for failing to disconnect 5.1 million subscribers that the regulator had deemed unregistered.
The case has been in court and the telecoms company has set aside $600 million (R9.3 billion) for potential settlement of the fine imposed by regulator.
While the impact of the huge fine has forced the South Africa Company to cut dividends, the faltering performance of MTN can be attributed to a weak subscriber base in major markets that culminated in flattish sales.
Sales were up by a mere 0.1 percent to R147.06 billion ($9.80 billion) in 2015 from R146.93 billion ($9.79 billion) in 2014.
Weak macro economic conditions in most markets that resulted in lower consumer spend, ongoing challenges in Syria, Sudan, Yemen and Afghanistan and economic doldrums in home market contributed to the dent at the top lines of MTN Ltd.
The company’s return on equity (ROE) fell to 15.60 percent in December 2015 as against 28.25 percent in 2014, as a result the drag in earnings.