Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

4G/5G

Telkom Reports 5.3% Hike in Full Year Revenues

Article Image
PRESS RELEASE -- Telkom doubles mobile subscribers, delivers solid group performance.

Key salient features:

  • Group operating revenue up 5.3% to R41.8 billion

  • Headline earnings per share (HEPS) up 22.6% to 722.0 cents

  • Earnings before interest, tax, depreciation and amortisation (EBITDA) up 8.5% to R11.3 billion

  • Adjusted free cash flow up 12.9% to R534 million.

  • Final ordinary share dividend of 249 cents taking the annual dividend to 362 cents, an increase of 2.0% year on year

    Telkom's performance for year ended 31 March 2019, driven by the mobile business, saw mobile services revenue increase by 58.3% underpinned by the groupís broadband-led proposition. This is on the back of increased competition and the fact that technology changes continue to place the fixed business under pressure.

    The results offer proof that the groupís strategy of investing in new technologies continues to bear fruit.

    Group operating revenue increased by 5.3% to R41.8 billion. EBITDA increased by 8.5% to R11.3 billion, which can be attributed to our ongoing sustainable cost management. The group EBITDA growth is faster than the revenue growth of 5.3%. The EBITDA margin expanded by 0.8% to 27.1%. Telkom remains focused on operational efficiencies to preserve margins while revenues evolve, and we manage the impact of inflation on expenses.

    "In line with global trends, our fixed business remains under pressure. With that in mind, investing in technologies to drive future revenue streams necessitates the evolution of the group's skill base and acquiring various capabilities. Our human capital investment focuses on creating efficiency and effectiveness in the context of growing the business, achieving operational excellence, retaining key skills and ensuring our future competitiveness," said Telkom Group CEO Sipho Maseko.

    Telkom Group CEO Sipho Maseko.
    Telkom Group CEO Sipho Maseko.

    The significant growth in mobile service revenue was supported by 85.9% growth in active subscribers to 9.7 million, as our affordable broadband-led proposition continues to resonate with customers. Despite adding 4.5 million subscribers, Telkomís blended average revenue per user was stable at R100.

    Over the past six years, the contribution of our growth pillars grew significantly with mobile revenue contribution increasing from 3.2% to 25.7%, while information technology revenue grew from 0.9% to 16.2%. We continue to invest in the fibre ecosystem which is sustaining our fixed data revenue.

    Gyroís revenue increased by 24.%, underpinned by the groupís strategy to separate the property portfolio to improve management focus and unlock value for the group. Further to this, the dedication and focus on the mast and tower as well as the property portfolio has enabled the business to service clients more effectively and will enhance competitiveness as the largest independent tower company in South Africa. Telkom will continue to explore and deploy the latest technology to reduce development cost and maximise development yield while offering competitive rental levels to clients.

    The challenging operating environment in South Africa, including a technical recession in the first half of the year, with consumers who remain under pressure from increases in tax and fuel and a weaker currency, continued to dampen the performance of BCX which touches all sectors of the economy. However, BCXís revenue significantly improved from a R1 billion revenue decline in the prior year to a revenue decline of R683 million. This is attributable to several initiatives to stabilise the business, including a change in operating model and the enhanced strategy to focus on customer retention.

    The pricing transformation journey that Openserve embarked on two years ago is starting to show positive signs and revenue was resilient despite customers migrating to next-generation technologies at lower price points. Despite price reductions over the past two years, ongoing voice revenue pressure and a change in the revenue mix, Openserve contained the revenue decline at 3.3% and EBITDA grew by 3.4 points to 37.1%. This was enabled by, among others, our strategy to modernise the network to improve cost to connect and cost to serve.

    Telkomís capital investment of R7.7 billion - with a capital expenditure to revenue ratio of 18.4% Ė continues to underpin business growth. The ongoing investment enabled Telkom to grow new revenue in evolving technology, offsetting the traditional revenue shrinkage. Telkom will continue to proactively invest in technologies and the network so that the group remains at the forefront of change.

    ENDS

  • Innovation hub

    Story

    Orange Ventures, Digital Africa promise more funding for startups

    Orange Ventures and Digital Africa are teaming up to invest more in tech startups in Africa and the Middle East through Digital Africa's Fuzť program and the Orange Digital Center network.

    Story

    Hot startup of the month: Rwanda's Ampersand

    Connecting Africa's hot startup this month is Rwanda's Ampersand, which designs, builds, and manufactures electric motorcycles and battery packs for motorcycle taxis.

    More Innovation hub

    Latest video

    More videos

    Partner perspectives

    All Partner Perspectives

    Sponsored video

    More videos

    Follow us on X

    Industry announcements

    More Industry announcements

    Upcoming events

    Africa Tech Festival 2024
    November 11-14, 2024
    Cape Town, South Africa
    More Upcoming events

    Africa Tech Perspectives

    Story

    Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

    Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.

    Story

    The 100 most influential African leaders in 2023

    A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.

    Story

    Deep dive into East Africa's tech startup ecosystem

    New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

    More Africa Tech perspectives

    Guest Perspectives

    Story

    Omdia View: April 2024

    By Omdia Analysts

    April 2024's telecoms highlights in the Middle East and Africa included a license for Starlink in Ghana, new mobile termination rates in Ethiopia, and 6G trials in Bahrain – that and more in the latest Omdia View.

    Story

    Leveraging agritech to build resilience against climate change

    By Francis Hook

    ICT analyst Francis Hook discusses agritech in Africa and how the agricultural sector is using technology to build resilience against the negative effects of climate change and to ensure food security.

    More Guest Perspectives

    Like us on Facebook

    Newsletter Sign Up


    Sign Up
    Tag id test-002