Telkom’s numbers in black and red

Telkom on Friday (8 June) reported a decline in operating revenue to R33.1 billion, for the year ended March 2012. Headline profit for the year fell 32.8% to R1.658 billion, while profit after tax for the year declined 93% to R179 million.

The group decided against a dividend declaration in respect of the financial year ended 31 March 2012.

“Telkom faces many challenges at the moment but we will stay calm, determined and focused on delivering on the promise of our business and strategy going forward,” said CEO Nombulelo Moholi.

Voice revenues declined 6.5% to R12.835 billion as a result of lower minutes of use due to mobile substitution and, to a lesser extent, lower tariffs.

Total data revenue decreased 1.7% to R10.517 billion as a result of income generated from the Soccer World Cup included in the previous year. Excluding the revenue relating to the 2010 Soccer World Cup, data revenue increased 1.6%.

Some of the highlights of Telkom’s results for the year ended March 2012 include:

  • ADSL subscribers increased 10.0% to 827,091.
  • Calling plan subscribers increased 4.6% to 819,019.
  • Managed data network sites increased 13.9% to 38,902.
  • Active mobile subscribers increased 213.2% to 1,483,401 with a blended ARPU of R68.86.
  • Operating revenue down 0.7% to R33.1 billion.
  • Fixed-line employee expenses decreased 15.0% to R6.6 billion.
  • Mobile EBITDA loss of R2.2 billion after elimination.
  • Group EBITDA margin decreased to 25.8% from 28.1%.
  • Fixed-line EBITDA margin increased from 36.8% to 38.6%.
  • Basic earnings per share decreased 97.8% to 10.4 cents per share.
  • Headline earnings per share decreased 33.0% to 324.7 cents.
  • Free cash flow generated of R2.1 billion (2011: R2.2 billion).
  • Net debt to EBITDA remains 0.5x.

As mentioned by Moholi, Telkom faces many challenges including a continued decline in fixed line subscribers, lower voice revenues and lower average revenue per user in their mobile division.

The following table provides an overview of the company’s performance over the last twelve months.

Service March 2011 March 2012 Growth
Telkom South Africa
ADSL subscribers 751,625 827,091 10.0
Calling plan subscribers 783,193 819,019 4.6
–Closer subscribers 753,951 787,117 4.4
–Supreme call subscribers 29,242 31,902 9.1
WiMAX subscribers 3,199 3,381 5.7
Internet all access subscribers 543,316 523,057 -3.7%
Fixed access lines (’000) 4,152 3,995 -3.8%
–Post-paid – PSTN 2,552 2,499 -2.1%
–Post-paid – ISDN channels 772 767 -0.6%
–Pre-paid 703 623 -11.4%
–Payphones 125 106 -15.2%
Fixed-line penetration rate (%) 8.3 7.9
Revenue per fixed access line (ZAR) 4,863 4,865
Total fixed-line traffic (millions of minutes) 20,545 19,372 -5.7%
–Local 5,563 4,513 -18.9%
–Long distance 2,806 2,683 -4.4%
–Fixed-to-mobile 3,563 3,785 6.2
–Fixed-to-fixed 104 164 57.7
–International outgoing 537 360 -33.0%
–Subscription based calling plans 3,988 3,636 -8.8%
–Interconnection 3,984 4,231 6.2
—-Mobile domestic 1,919 1,945 1.4
—-Mobile international 134 432 222.4
—-Fixed 951 1,055 10.9
—-International 980 799 -18.5%
Managed data network sites 34,163 38,902 13.9
Telkom Company employees 22,884 20,939 -8.5%
Fixed access lines per employee 182 191 4.9
Telkom Mobile
Total subscribers 1,199,596 3,053,393 154.5
Active Subscribers 473,604 1,483,401 213.2
–Pre-paid 440,775 1,039,448 135.8
–Post-paid 32,829 443,953 1,252.3
Base stations constructed 970 1,782 83.7
Employees 228 355 55.7
ARPU (Rand) 22.60 68.86 204.7
–Pre-paid 15.86 20.89 31.7
–Post-paid 238.57 206.83 -13.3%
Churn % – Pre-paid 58.9
Other International
iWayAfrica
–Active subscribers 25,184 22,386 -11.1%
–Employees 517 479 -7.4%
–Customer per employee 49 47 -4.1%
Other South African
Trudon employees 520 520
Swiftnet employees 107 107

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Telkom’s numbers in black and red