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MTN returns to H1 profit, posts $294m

Africa’s biggest mobile phone operator, MTN Group, returned to first-half profit on Thursday, marking a move away from a turbulent 2016 that highlighted the risks of the company’s emerging markets strategy.

The positive results were mainly attributable to the absence of charges related to a $1.1 billion fine imposed on the company by Nigerian authorities last year in a long-running dispute over unregistered SIM cards, Reuters recalled.

MTN, which operates in more than 20 countries in Africa and the Middle East, said headline earnings came in at 3.9 billion rand ($294.40 million), or 212 cents per share, in the six months to end June compared with a loss of 4.9 billion rand, or 271 cents per share, a year earlier.

The reported profit is equivalent to N107.46 billion using N365.50k as the benchmark foreign exchange rate from naira to dollar.

“These numbers give us hope for the future. It’s a very encouraging platform upon which to build our strategy,” said Rob Shuter, former Vodafone European head, who became chief executive in March.

Founded at the end of white rule in 1994, MTN’s clashes with regulators in the past few years had held back growth and threatened to tarnish its image as one of South Africa’s biggest commercial successes.

Shuter’s appointment is expected to put the company back on a growth path with a shift away from basic telecoms services towards offering its more than 200 million users the ability to pay bills or watch live football matches on their phones.

Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

MTN had said last week that it expected to return to profit in the first half of its financial year and that the loss in the first half of last year was mainly due to “non-recurring costs”, including the Nigeria fine.

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