African telecommunications giant, MTN has released a press statement warning its shareholders to expect full year losses for 2016. This is coming as the company plans to release its report on Thursday. The company blamed the losses in 2016 on a $1 billion regulatory fine in Nigeria, damaging foreign exchange rates and a share offering to promote black empowerment in South Africa.

According to the company, it expects to post a basic headline loss per share of 74 to 81 South African cents and a basic loss per share of between 137 and 151 cents. That compares to 2015 headline earnings of 746 cents a share and earnings per share of 1,109 cents.

MTN also cited losses on investments in Africa Internet Holdings, Middle East Internet Holdings and Iran Internet Group.

Nigeria’s regulatory fine is the major reason for its loss in 2016

MTN attributed the biggest loss of 455 cents a share to the fine in Nigeria, which is its biggest market. MTN Nigeria was fined for having 5.2 million active but unregistered SIM cards. Two of the unregistered cards were used in the kidnapping of a former Nigerian cabinet minister.

Nigerian authorities issued several warnings to telecommunications companies expressing concern that unregistered cards were being used by criminals, including the Boko Haram Islamic extremist group, which uses cell phones to detonate bombs. MTN Nigeria had to cut off some 11 million customers.

The company further stated that Professional fees related to settling the fine would bring losses of about 73 cents a share. The group hired former U.S. Attorney General Eric Holder, who negotiated the fine down from $3.9 billion.


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