Telkom earnings boosted by rise in mobile subscribers
Telkom on Tuesday announced a 20.6% rise in revenue to just over R20 billion for the period ended September 2016, driven by its acquisition of BCX, and improved mobile revenue.
Mobile voice and subscriber revenue increased 30% to R520 million, due mainly to a 42% increase in the number of active mobile subscribers. However, the group noted that blended ARPU declined a fraction, to R88.84, from R89.05 previously.
Telkom said that BCX was consolidated for the six months, reporting revenue of R3.6 billion compared to one month revenue of R489 million in the prior corresponding period.
Excluding BCX, operating revenue and net operating revenue grew 2% and 0.9% respectively attributable to the mobile business.
Telkom announced an interim dividend of 131 cents per share for the period.
Highlights
- Net operating revenue up 3.3% to R13.8 billion
- EBITDA increased 4.6% to R5.3 billion with an EBITDA margin of 26.1%
- Headline earnings per share (HEPS) increased 19.7% to 336.0 cents
- Capex increased 55.8% to R3.6 billion with capex to revenue of 18%
- Group net cash and cash equivalents increased to R1.8 billion
- Operating profit of R2.59 billion
- Revenue generated from mobile up 42% to R3.2 billion
Telkom said that mobile broadband revenue grew 43.2% to R1 billion supported by 2.3 million mobile broadband customers, an increase of 44.5% compared to the prior corresponding period.
“We now have 70.8% of our customer base using data at an average of 2.7 Gigabytes per customer per month,” said CEO Sipho Maseko.
“Our smartphone base has grown by 43.7 percent to 1.6 million. On the back of the upgrade of our network, in July we launched a groundbreaking broadband-led product, called FreeMe. Early indications show significant increase in gross connection monthly run rates and an uplift in ARPUs in the two month period,” he said.
In the fixed business, Maseko said that Telkom has seen a significant demand for fibre including existing ADSL customers migrating to fibre. “However we encountered operational issues with fulfilment of orders including the impact of the industrial action. We are currently reviewing our processes in order to improve fulfilment,” he said.
“We have seen an increase in ports activated via MSAN access by 24.1% to approximately 1.3 million homes passed.”
Fibre to the home increased to 144,512 homes and 850 gated communities. The current connectivity rate is above 13%, Telkom said. It added that it has approximately 42,176 fibre connections to business premises.
Maseko highlighted a significant reduction in headcount over the period as part of a transformation journey – down 14.3% to 12,184 people. BCX grew its employees by 6.7% to 6,234 people.
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