Telkom South Africa said its net revenues increased by 1.6 percent to ZAR 13.3 billion in the six months to 30 September compared with the same period in 2013. It said in light of the tough economic and business environment, this shows the resolve of management to curtail losses and improve the business in future. Profit fell by 62 percent to ZAR 1.11 billion from ZAR 2.89 billion a year earlier. Group EBITDA excluding one-off items increased by 12.1 percent to ZAR 4.4 billion. Headline earnings per share excluding one-off items increased 14.9 percent to ZAR 0.2617. The consolidated EBITDA margin, excluding one-off items, rose to 27.7 percent.
The mobile business produced a solid performance with EBITDA improving 50.7 percent from the prior period. The active mobile subscriber base increased 26.7 percent to 2.02 million over the past year. The company’s mobile operations now has 1.59 million pre-paid subscribers, and 429,365 post-paid subscribers. It also increased the blended ARPU of its active mobile subscribers by 22.4 percent to ZAR 71.99 from ZAR 58.81 a year ago.
Telkom recorded strong cash flow, improved operating margins, and a healthy performance from mobile business in particular. Group CEO Sipho Maseko said the results confirm that the business is on track for future growth. Mseko says the firm’s multi-year turnaround strategy, which began in 2013, is paying off, adding that it expects that this positive momentum will continue for the remainder of the financial year.
Operating expenditure, excluding depreciation, decreased by 2.4 percent to ZAR9.2 billion. This was largely due to a ZAR 199 million reduction in employee expenses relating to lower service and interest cost as a result of the lower post-retirement medical aid liability and a lower headcount.