Telkom’s shares surge 8% on turnaround completion
Shares in Telkom advanced more than 8% in afternoon trade on the JSE on Monday, after the company reported that its latest results marked a conclusion of a three-year turnaround strategy implemented in 2013.
By 14:55pm, shares in the company advanced R5.00 or 8.33%, to R65.00 on the local exchange in South Africa, with returns in the company swinging back into positive territory for investors – up 2.66%.
Telkom’s market cap increased to R34 billion.
The company reported a 15.5% increase in headline earnings for the year ended March 2016, while operating revenue climbed 13.9% to R37.3 billion.
Normalised profit after tax reached R4 billion, compared to R3 billion for the previous period.
The board declared a dividend of 270 cents, up 10% on the previous year’s total dividend.
Key financial highlights:
- Group net revenue up 4% to R28 billion
- Normalised headline earnings per share (HEPS) increased by 15.5% to 658 cents
- Operating revenue up by 14% to R37 billion
- Normalised EBITDA increased by 16% to R11 billion
- Capital expenditure increased by about 17% to R6 billion
- Normalised free cash flow of almost R4 billion
Telkom Group CEO Sipho Maseko said: “The mobile business has delivered a star performance during this phase, reducing its EBITDA loss from more than R2 billion three years ago to R43 million this year. Since the fourth quarter, the mobile business has been breaking even on a monthly basis.”
Telkom reported a 23.8% rise in active mobile subscribers to 2.7 million, from 2.18 million before. Pre-paid customers rose 19% to 1 912 415, with Post-paid customers up 37.2% to 794,272.
Improvements
- Active customer growth of 23.8% with improved blended ARPU of R89
- 81,503 homes passed with fibre
- LTE integrated sites up 9.9% to 1 448
- Mobile sites integrated increased to 2,663, from 2,510
- Mobile service revenue up 39.3%
“In the year ahead, an aggressive fibre rollout is our number one priority, while simultaneously deploying our other capital resources as we focus on revenue generation and cost efficiency to grow earnings,” said Maseko.
More on Telkom
Telkom hikes dividend, says turnaround is complete
Telkom spends R2.2 billion on job cuts
Telkom shareholder questions R18.8 million pay to former CFO
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