TeleMasters points to continued recovery

·2 Jul 2013

TeleMasters, a listed fixed-line telecommunication service provider, has showed signs of a continued recovery in delivering a small operating profit for the six month period ended March 2013.

Revenue declined to R70.75 million, from R99.61 million, but the group recorded a small profit of R107,028, from a prior loss of R3.72 million.

Diluted headline earnings per share increased to 0.15 cents, from a prior loss of 6.94 cents per share.

TeleMasters said its revenue had fallen mainly because of services previously provided using the Least Cost Routing (LCR) technology stopping, as larger tenders were not renewed.

It noted that its conversion of customers from LCR technology to its digital technology is proceeding at a constant pace and each month which passes results in a higher margin operation.

“During the previous year, less than 5% of total revenue resulted from the sale of fixed line airtime over our digital platform compared with over 21% in the current six month period,” TeleMasters said.

“This conversion,” it added, “assures the group’s profitability and sustainability over the long term on the back of lower revenue figures, but with the higher anticipated and currently realised gross and net profit percentages.

The group stressed that trading conditions remain tight, but the overall financial position of the group is sound with good current ratio.

TeleMasters said it continues to invest large amounts into equipment, which is partially funded from operating revenues and in part by external loan finance. A total of R2.95 million has been invested in new equipment during the reporting period.

An interim cash dividend of 0.5 cent per share was declared for the quarter.

“The results are in line with the expectations of the board which has anticipated a gradual return to profitability and higher dividends with the passing of time,” TeleMasters said.