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South Africa's MTN flags up to 15% fall in first-half profit

08/02/2021 | 11:04am EDT
The logo of MTN is pictured in Abuja

JOHANNESBURG (Reuters) -South African mobile operator MTN Group said on Monday it expects up to a 15% decline in first half profit due to non-operational and one-off items, and booked an impairment loss related mainly to its Yemen subsidiary.

Headline earnings per share, the main profit measure in South Africa, is expected to decline by between 5% and 15% for the six-months ending June 30, the company said.

The non-operational and one-off items, totalling 118 cents per share, include items largely related to foreign exchange losses and COVID-19 related donations to the Africa Centre for Disease Control and Prevention and the Coalition Against COVID task force in Nigeria, MTN added.

MTN, with 278 million subscribers across 21 markets, said the impairment losses totalling about 75 cents per share - not part of headline earnings - would impact the earnings per share by between 75% and 85% along with other items.

Headline earnings take into account only operational and trading activities.

The company also said that a United States judge recommended dismissing an "anti-terrorism" complaint against it in Afghanistan on grounds that the court did not have jurisdiction over MTN defendants.

The suit, filed in 2019 in the District Court of Columbia, alleged that MTN along with seven multinational companies violated the U.S. Anti-Terrorism Act by paying protection money to al-Qaeda and the Taliban.

"Across our territories, we conduct our business in a responsible and compliant manner. We will continue to defend our conduct and reputation where necessary, in this regard," MTN Group Chief Executive Ralph Mupita said, welcoming the recommendation.

MTN will release its interim results on Aug. 12.

(Reporting by Nqobile Dludla; Editing by Promit Mukherjee and Mike Harrison)

© Reuters 2021
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