Telkom's earnings up 35.1% to 388 cents

Telkom's Sipho Maseko says the turnaround plans at Telkom are starting to show results. Image: Telkom

In the previous financial year fixed revenue was R8.591bn. Telkom said the drop was attributable to a 2.1% decline in voice minutes‚ resulting from fixed-to-mobile substitution. This translated to a decrease of about R190m related to the pass-through of reduced mobile termination rates to fixed-line customers.

Telkom's results‚ however‚ showed that its mobile revenue increased 72.7% to R2.347bn. Mobile data revenue increased 80.2% to R656m. Telkom said that its active mobile subscribers increased 17.6% to 1‚8m‚ with a blended average revenue per user of R62.79.

The operator‚ which has been under pressure‚ told shareholders that it continued to grow its network. Telkom Mobile now has 2‚428 integrated sites - an increase of 22.3%. The company also grew its long-term evolution sites to 1‚183.

The results showed that Telkom's earnings before interest‚ tax‚ depreciation and amortisation‚ excluding one-off items‚ improved 3.8% to R8.4bn.

Telkom's operating expenses‚ excluding depreciation‚ decreased 2.1% to R18.2bn and free cash-flow generated remained strong at R1.145m.

Telkom's Chief Executive Sipho Maseko said: "Our efforts to turn Telkom around are starting to produce results. Basic earnings per share were up from 268.5 cents a share last year to 285.2 cents a share this year," he said.

The results also reflected challenges facing South Africa's mobile telecommunications sector. Despite the revenue increase from Telkom's mobile operations of 72.7%‚ mobile voice and subscriber revenue decreased 20.4%.

"This can be attributed to the expiry of bulk hybrid contracts and a clean-up of our debtors' book‚ which has resulted in an improved quality of our customer base‚" Telkom said.

Mobile interconnection revenue increased by 3.9%. Fixed-line domestic interconnection revenue decreased 18.5% to R458m‚ primarily driven by the reduction in fixed termination rates.