[dropcap]T[/dropcap]elkom said on Monday that full-year earnings and the dividend both rose as South Africa’s biggest landline provider enters a new phase of growth by giving more autonomy to its four business units.
Earnings per share excluding one-time items increased by 12% to R7,31 in the year to end-March 2017, the Pretoria-based company said in a statement. Operating revenue gained 9,8% and the dividend payout rose 56% to R4,22/share.
“We made significant strides in a difficult operating environment which was characterised by regulatory uncertainty, increased competition and a weak economic environment,” CEO Sipho Maseko said in the statement. The integration of 2015 acquisition BCX into the business-to-business division and the accelerated growth of the mobile-phone unit drove the earnings increase, the CEO said.
Following a three-year turnaround strategy that returned Telkom to profit, Maseko is giving the company’s four business units more independence to further boost earnings. The phone operator, almost 40% owned by the South African government, started a mobile unit, the country’s fourth biggest, to offset a decline in landline use and challenge market leaders Vodacom and MTN.
Telkom shares rose 3,1% to R75,99 on Friday, and have soared more than 400% under Maseko’s watch. That values the company at R40bn.
Capital expenditure increased 43% to R8,7bn as the company invested in fibre networks and the wireless business. Mobile subscriber numbers rose by 48% to about 4m. — (c) 2017 Bloomberg LP