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Update on trading statement for the six months ended 30 June 2016
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/009584/06)
Share code: MTN
ISIN ZAE000042164
("MTN")
UPDATE ON TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2016
MTN is currently in the process of finalising its financial results for the six months ended 30 June 2016
(“HY2016”) which will be announced on the Johannesburg Stock Exchange News Service on Friday, 5 August
2016.
Following the trading statement published on 19 July 2016, shareholders are further advised that MTN expects
to report for HY2016 a basic headline loss per share of between 285 cents and 255 cents and a basic loss per
share of between 315 cents and 285 cents. In the prior year comparable period MTN reported headline
earnings per share of 654 cents and earnings per share of 653 cents.
These results were negatively impacted by the following:
* The Nigerian regulatory fine which had a material impact on results for the period. The income
statement charge reflects the present value of the balance outstanding at 10 June 2016 of Naira 280
billion (USD1,418 billion, using the exchange rate prevailing at the time), reduced by the reversal of
the provision made in December 2015 of Naira 119,6 billion (USD 600 million, using the exchange rate
prevailing at the time). In total the net effect of the Nigerian regulatory fine on the current period was
a negative impact of 474 cents per share (cps).
* With the depreciation of the rand and operating currencies against the USD, earnings were further
negatively impacted by foreign exchange losses of 135 cps.
* Losses from tower companies of 136 cps (largely impacted by foreign denominated loans);
* Increased short-term losses from the digital businesses (Africa Internet Holdings and Middle East
Internet Holdings) when compared to the previous reporting period.
* Hyperinflation adjustments in respect of MTN Irancell contributed.
* Higher professional services charges were also a drag in the period.
* The underlying operational results for HY2016 were further affected by the under-performance of
MTN Nigeria. MTN Nigeria’s performance was impacted by the disconnection of 4,5 million
subscribers in February 2016, the final batch of subscribers to be disconnected in compliance with the
Nigerian Communications Commission subscriber registration requirements. The withdrawal of
regulatory services which were re-instated on 15 March 2016 with approval for promotions and price
plans granted in early May 2016 also negatively impacting MTN Nigeria’s performance.
* The relatively weaker operational performance of MTN South Africa, which is expected to report a
decline in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margin, impacted by
the marked increase in handsets sold during HY2016.
* The basic loss per share was in addition impacted by impairment on property, plant and equipment in
South Sudan as well as goodwill impairments in Guinea Conakry and Afrihost Proprietary Limited.
The financial information on which this trading statement is based has neither been reviewed nor reported on
by MTN`s external auditors.
Fairland
4 August 2016
Sponsor
Deutsche Securities (SA) Proprietary Limited
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