Telkom profit hit by retrenchments

Telkom on Monday (16 November) reported a marginal 1.2% rise in group net revenue to R13.5 billion for the six month period ended September 2015.

Total revenue climbed to R17.2 billion, from R16.3 billion in the comparative period  in 2014.

The group reported a profit after tax of R606 million (September 2014: R1.1 billion), down 43.8% mainly as a result of voluntary early retirement and severance package costs of R1.523 billion for 3,108 employees in the current period, and R325 million in the comparative period for 406 employees.

Operating profit slipped to R902 billion, from R1.6 billion before, with normalised profit after tax of R1.7 billion, from R1.3 billion, in 2014.

“We managed to reduce operating costs by 2.3%. This reduction was largely driven by lower employee expenses and effective property management costs,” Telkom said.

Highlights

  • Mobile services and subscription revenue increased 40.5% to R1.2 billion
  • Mobile data revenue increased 68.5% to R711 million
  • EBITDA, excluding one-off items, improved 15.1% to R5.0 billion
  • Headline earnings per share, excluding one-off items, increased 13.9% to 280.6 cents
  • Operating expenses, excluding depreciation, decreased 2.3% to R9.0 billion
  • Capital expenditure lifted by 20.4% to R2.3 billion

Challenges

  • Managing the fixed-line voice usage revenue which decreased 14.1% to R3.1 billion
  • Interconnection revenue decreased 17.9% to R598 million
  • 25.8% decline in revenue from leased lines offset by higher capacity from Megalines and Metro Ethernet

Improvements

  • ADSL subscribers increased 4.2% to 1,012,416
  • Active mobile subscribers increased 11.5% to 2,257,404 with a blended ARPU of R89.05
  • Ports activated via MSAN access increased 48.0% to 1 030 441
  • Mobile sites integrated increased 3.1% to 2,549
  • LTE sites integrated increased 8.3% to 1,381

Telkom announced a final dividend of 245 cents for the period, made up of an ordinary dividend of 215 cents per share and a special dividend of 30 cents per share.

Telkom Group CEO Sipho Maseko said that during the first six months of the
2016 financial year, the company continued with its efforts to transform Telkom and stabilise revenue.

“The challenges we faced during the period included increasing competition and a soft economy,” he said.

“The challenges of intense competition, the soft economy and the evolutionary nature of the industry we find ourselves in will remain. As a result, the ongoing transformation of our business, from both a revenue and cost efficiency perspective, remains our key focus,” said Maseko.

More on Telkom

Telkom retrenchments cost R1.5 billion

Telkom officially wants to buy Cell C

Telkom offers ‘free’ funeral cover

Fibre players caught Telkom by surprise

Telkom CEO must be fired: union

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Telkom profit hit by retrenchments