S.Africa's MTN hit by slide in Iran rial

JOHANNESBURG (Reuters) - The impact of Iran's currency slide has reached beyond its borders, hitting shares of MTN Group, the South African mobile operator that derives nearly a tenth of its revenue from the Middle Eastern country.

MTN, which has been unable to repatriate profits from its Irancell unit because of Western sanctions on Iran, flagged in August that further rial weakness would deflate its second-half earnings.

Its shares were down 3.7 percent at 152.06 rand in afternoon trade in Johannesburg, bringing its losses this month to nearly 5 percent.

The rial has lost about a third of its value against the U.S. dollar in the last two weeks as U.S.-led sanctions cut the country's ability to earn hard currency from oil exports.

MTN operates in 21 countries across Africa and the Middle East, including a 49 percent stake in Irancell.

"It's just that there will be foreign exchange losses that will be included in the earnings number for the year, that's the main concern," said one Johannesburg-based portfolio manager, who declined to be identified.

The rial has collapsed two-thirds in little more than one year in the open market but the government's official rate has remained the same since January.

"The unofficial rate trades well below the official rate. The fear is always that if the official rate drops to the black market rate, then MTN will take a knock in their report," said one analyst, who also did not want to be named.

MTN said in August it was in talks with South African and U.S. officials about moving money out of the country. The company's chief executive said at the time it had been unable to take cash out of the business for at least six months.

MTN is being sued by rival Turkcell for $4.2 billion in a U.S. court, saying it used bribery and lobbied South Africa to support Tehran's military in return for a 2005 cellular licence in Iran that was originally awarded to the Turkish firm.

MTN has denied the charges.

Source: http://news.yahoo.com/africas-mtn-hit-slide-iran-rial-134838499--finance.html

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