Telkom shares touched R30 for the first time since April after the JSE-listed telecommunications operator published interim financial results that show it is making headway in fibre broadband and data-led mobile services.
Despite reporting a 1.8% decline in profit, the numbers suggest Telkom is weathering a difficult macroeconomic environment and intense competition.
Broadband service income partly offset the ongoing erosion of revenue from fixed voice and legacy data.
Telkom, which has government as its largest shareholder with a 40.5% stake, said headline earnings per share fell to 191.5c in the six months to 30 September 2024, down from the 195c reported a year ago.
However, adjusted Heps grew by 57.5%, excluding R160-million in restructuring costs and the R618-million cost of switching the Telkom Retirement Fund from a defined benefit to a defined contribution funding arrangement.
Group revenue was marginally up (1.9%) to R21.4-billion, while mobile service revenue saw a more robust growth of 10%, both helped by the continued strong demand for value-compelling data propositions, the company said in a statement.
Telkom has been investing in migrating customers away from copper-based technology to faster and “next-generation network” offerings such as fibre and 4G/LTE as customers seek faster internet for richer content.
Capital investment
Consequently, fibre data service revenue and IT services revenue recorded growth of 15.5% and 1.9%, respectively, offsetting the group’s costs of ditching legacy services.
“Our next-generation broadband offerings, enabled by ongoing capital investment in our networks, have positioned Telkom as the best-value mobile network in South Africa,” said the group, which maintained a market-leading fibre home connection rate of 50% for the period.
Read: Telkom gets tribunal go-ahead for Swiftnet sale
Telkom said in June it hopes to resume dividend payments at the end of the current financial year, after suspending them in 2020 to conserve cash and also buy much-needed spectrum.
After touching R30/share in morning trading on the JSE, Telkom’s share price was trading at R29.89 as of 9.37am, up by 3.6% over Friday’s closing price. Over the past year, the shares have added more than 20% to their value. – Sfundo Parakozov, © 2024 Reuters, with additional reporting © 2024 NewsCentral Media
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