South Africa’s Telkom profit jumps on growth in mobile, enterprise

PUBLISHED: Mon, 05 Jun 2017 10:26:48 GMT

JOHANNESBURG (Reuters) – Telkom SA, South Africa’s biggest landline provider, reported a rise in full-year earnings and revenue on Monday, buoyed by a strong performance by its mobile business and its Business Connexion enterprise division.

With the completion of a turnaround plan, which aimed to bring down costs, including job cuts, and better compete with wireless operators, the company’s focus on growth under Chief Executive Sipho Maseko shows signs it is paying off.

Telkom, in which the government owns a stake of about 40 percent, said headline earnings per share for the year-ended March rose 12.4 percent to 731.4 cents from 650.9 in the comparable period last year.

“I am pleased with our solid performance, which was boosted by the integration of BCX (Business Connexion Group) and the robust performance of our Mobile business,” Maseko said in a statement.

Telkom, whose core business is providing fixed and mobile phone lines and data, bought BCX for 2.6 billion rand ($202.48 million) in 2015, seven years after competition concerns scrapped its first bid.

“BCX remains a key growth platform for the group,” Maseko said.

Shares in Telkom were up 2 percent to 77.49 rand by 0709 GMT.

Net operating revenue rose 7.9 percent to 31.9 billion rand, while mobile service revenue increased by 38.4 percent to 3.4 billion rand. Mobile active subscriber numbers grew by 47.7 percent to approximately 4 million.

“This was a result of an expansion in our network, extension of our distribution channels and the launch of innovative products,” Maseko said, referring to Telkom’s mobile arm, initially known as 8ta, launched in 2010.

Telkom has been looking to boost its mobile business, launched in 2010, to offset the falling use of landlines. The company said fixed-line voice usage and subscription revenue decreased by 6.2 percent for the year-ended March.

The group declared an annual dividend of 422 cents per share, up 56.3 percent.

($1 = 12.8406 rand)

(Reporting by Nqobile Dludla; Editing by Stephen Coates and Louise Heavens)

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