Duncan McLeod
1 minute read
30 Apr 2015
12:00 pm

Telkom earnings shoot up

Duncan McLeod

Telkom's normalised headline earnings per share (Heps) are expected to be between 40% and 60% higher in the year ended March 31 than in the 2014 financial year, the company said yesterday.

FILE PICTURE: The Telkom Tower as seen from Houghton, 28 September 2013. Picture: Michel Bega

But retrenchments and other costs would drag Heps between 20% and 40% lower, it said. Telkom has benefited to the tune of R743 million from lower payments to mobile operators as a result of the reduction in termination rates. Lower asset impairments and writeoffs and a decrease in expenses related to a post-retirement medical aid liability helped boost normalised earnings.

Fixed-line voice usage and lease-line revenues continued to decline, while a “commendable performance” in its mobile business continued in the second half, driven by growth in subscribers and higher post-paid and prepaid average revenues per user.

“Our mobile data offering is performing well with usage and revenue growing year on year. This as well as good data growth in our consumer market was instrumental in us achieving flat growth in gross revenue despite these challenges,” Telkom explained.

“Although we managed to further improve on cost efficiencies in certain areas, we experienced delays in the implementation of other initiatives … including the workforce reduction initiative and the renegotiation of certain key contracts.”

There was a reduction in marketing expenses, consulting and transformation expenses, and vehicle costs. These were partially offset by annual salary increases, higher bad debts and electricity costs.

Telkom’s share price was quoted trading down by 3% in mid-afternoon trading. – TechCentral