South African mobile phone operator MTN has reported its first-ever half-yearly loss of $357 million.
The company blames the situation on the billion dollar fine it had to pay in Nigeria earlier this year.
Late last year, Nigeria slapped the telecom giant with a $5.2 billion fine for failing to disconnect some 5 million unregistered SIM cards as the country intensified its war against crime and militant attacks.
The west African nation is on a quest to halt the use of unregistered cards following concerns raised that they are being used for criminal activities.
The fine was later reduced to $3.9 billion but eventually MTN agreed to pay $1.7 billion (330 billion naira) earlier this year, ending eight months of protracted negotiations between the two sides.
The figure, a third of the initial penalty, according to MTN, wiped away 768 million dollars from its headline earning for the first six months of the year.
The company is thus set to cut by almost half the dividends it will pay out to shareholders for the first half of the year. It is expected to pay 250 cents per share for the first half of 2016, a figure which is down nearly by 50 percent from a year earlier.
The company however says its full-year dividend could top the 700 cents per share previously forecast if operating conditions materially improve.
The telecom firm noted that its results were also affected by unfavourable currency swings and under performance in its home market of South Africa and in Nigeria.
MTN, Africa’s biggest mobile phone operators has been struggling to accelerate its subscriber base and profit due to price wars and regulatory pressure.