Light at the end of the tunnel
Why struggling MTN is a 'buy'
Despite a slew of setbacks, MTN seems ripe for a comeback, with some market punters already in its corner
MTN has suffered huge share price and earnings losses since October 2015, when it was hit with a multibillion-rand fine in Nigeria. Despite this, Africa’s largest wireless carrier is set for a strong comeback, analysts say. Last week, it warned that it will report a loss for the 2016 financial year largely as a result of the Nigerian fine, poor performance from SA and Nigeria, and currency fluctuations. However, some factors that have affected its 2016 financial performance were nonrecurring, meaning a much better performance could be expected in the 2017 financial year. The Nigerian debacle has forced the company to overhaul its operations and its management. It went on a recruitment drive and has poached a number of bankers and telecoms executives. Apart from poor performance from its two biggest operations and currency movements, the oil price also had an impact on MTN’s operations in Iran and Nigeria, both largely dependent on it. Competition in many of its markets has also inte...
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