{"id":26881,"date":"2012-11-20T00:34:59","date_gmt":"2012-11-19T22:34:59","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=26881"},"modified":"2012-11-20T14:52:05","modified_gmt":"2012-11-20T12:52:05","slug":"it-will-get-worse-telkom-ceo","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/telecommunications\/26881\/it-will-get-worse-telkom-ceo\/","title":{"rendered":"It will get worse: Telkom CEO"},"content":{"rendered":"

Telkom<\/a> CEO Nombulelo Moholi<\/a> says the group’s financial performance will continue to get worse before it improves.<\/p>\n

It echoes her sentiments made in June<\/a>, when the group reported its annual results.<\/p>\n

On Monday (19 November) Telkom recorded a 48.9% drop in group profit before tax of R547 million for the six months ended September 2012.<\/p>\n

The group reported a marginal decline in revenue for the six months ended September 2012, but an 80.6% decline in headline earnings per share to 37.2 cents.<\/p>\n

Shares in Telkom have lost nearly 50% in value in 2012, dropping below R16 last week.<\/p>\n

Speaking during a conference call announcing the group\u2019s results, Moholi put a lot of emphasis on how Telkom intended on bringing stability to its troubled management.<\/p>\n

The company head added that government would only likely shed light on a long-term strategy for the group in March.<\/p>\n

\u201cTelkom is engaged in constructive dialogue with its key stakeholders to chart a successful way forward.”<\/p>\n

\u201cWhile we anticipate government providing an understanding of its policy direction, we remain focused on achieving our current business strategy,\u201d said Moholi.<\/p>\n

Following events at the company\u2019s recent AGM – where four non-executive directors were not re-elected to the board by a majority of shareholders – the board has been reconstituted with the appointments of Jabulane Albert Mabuza<\/a>, Kholeka Mzondeki<\/a> and Leslie Maasdorp<\/a>.<\/p>\n

On Friday (16 November), the board also elected Mabuza as chairman. The next step in the process will be the appointment of further directors and board committees, Moholi said, which she hoped would reach between 13-14 in number.<\/p>\n

Moholi admitted that Telkom\u2019s future performance hinged on the company\u2019s ability to address several key issues, including its engagement with government, which has a 39.8% stake in the group.<\/p>\n

Cost cutting<\/strong><\/p>\n

Telkom reported a 1.6% rise in operating expenses to R15.6 billion for the interim period. As a result, chief financial officer Jacques Schindeh\u00fctte<\/a>\u00a0said that Telkom would look to implement cost cutting measures, including those relating to property, procurement related goods or services, costs relating to rural services and labour costs.<\/p>\n

He also questioned the group\u2019s ability to launch a fourth mobile player in South Africa \u201cwithout bleeding cash\u201d.<\/p>\n

However, Schindeh\u00fctte said that a policy to tackle rising expenses could not be agreed upon until new leadership was put in place, following Moholi\u2019s decision to step down as group CEO earlier this month.<\/p>\n

While government has expressed its intention to provide broadband for all by 2012, hinting that it may use Telkom as the vehicle to do so, Schindeh\u00fctte said that Telkom\u2019s commercial viability needs to be addressed.<\/p>\n

He said that, while it was vital to get clarity on government\u2019s national broadband plans, it should be viewed in isolation to the commercial reality facing the company.<\/p>\n

Related article<\/strong><\/p>\n

No Cell C deal on the table: Telkom CEO<\/strong><\/a><\/p>\n

Telkom to see massive strategy shift<\/strong><\/a><\/p>\n

Telkom earnings dive 80.6%<\/strong><\/a><\/p>\n

Telkom\u2019s fixed line numbers the lowest in 15 years<\/strong><\/a><\/p>\n

Telkom value shrinks R60bn in 4 years<\/a><\/strong><\/p>\n

Crisis-hit Telkom dips below R17<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Telkom CEO Nombulelo Moholi says the group’s financial performance will get worse before it improves.<\/p>\n","protected":false},"author":9,"featured_media":26886,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[135,26,1079,2198,65],"class_list":["post-26881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-earnings","tag-headline","tag-jacques-schindehutte","tag-nombulelo-moholi","tag-telkom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/26881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=26881"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/26881\/revisions"}],"predecessor-version":[{"id":26888,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/26881\/revisions\/26888"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/26886"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=26881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=26881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=26881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}