JOHANNESBURG – Shares in South Africa’s MTN fell 5% as the company said it expects a drop in first-half earnings, blaming a weaker exchange rate that hurt its international business.
Africa’s largest mobile operator said in a statement its headline earnings per share (EPS) will be between 10% and 15% lower for the six months through June 30 compared with the corresponding period last year.
Headline EPS is the main profit measure in South Africa that excludes one-off items.
Lower oil revenues slashed economic growth and pummeled the currency in Nigeria, MTN’s largest market, as the price of crude slid to multi-year lows earlier this year.
Exchange rate movements impacted the rate at which revenues were translated and increased foreign exchange losses, the company said.
MTN’s Nigerian unit was also affected by a nation-wide fuel shortage in May. The shortage brought much of Nigeria to a standstill as private generators that produce most of the electricity for the nation’s 170 million inhabitants and businesses ran out of fuel.
The chief executive for MTN’s South African operations, Ahmad Farroukh quit earlier in July during a two-month-long strike by about 2,000 workers, days before the strike was resolved. Mteto Nyati was appointed to replace Farroukh.
Shares in MTN dropped pared losses to trade 5.98% lower at R200.30 at the close.