Telkom - Telkom said first-half earnings rose 20 percent as South Africa’s biggest landline provider reported a maiden profit for its faster-growing mobile business.
Earnings per share excluding one-time items were 3.36 rand in the six months through September, the Pretoria-based company said in a statement on Tuesday. That was in the middle of a range forecast by Telkom last month. Earnings before interest, taxes, depreciation and amortisation at the mobile unit were R214 million ($15 million), compared with a loss of R37 million a year earlier.
“Our mobile business has been able to establish itself as a meaningful player in the market,” CEO Sipho Maseko said in the statement. “We intend to grow our scale in the mobile market through focusing on the post-paid and data market where we are already making inroads.”
Under Maseko, Telkom is developing its mobile-data service to offset the decline in revenue from landlines. The unit is the country’s fourth biggest, behind Vodacom Group, MTN Group, and Cell C. Telkom, about 39 percent owned by the South African government, has also been reducing costs, and has cut the workforce to just over 12 000 from 21 000 three years ago.
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The shares jumped as much as 7 percent in early trade in Johannesburg, the biggest gain since October 27, and traded 4.9 percent higher at R62.62 as of 9:11 a.m. The stock has declined 2.6 percent this year, valuing the company at R33 billion.
Telkom will pay an interim dividend of R1.31 a share, compared with R2.45 a year earlier. Operating revenue gained 21 percent to R20.2 billion as the company integrated 2015 acquisition Business Connexion.
Capital expenditure increased 56 percent to R3.6 billion in the half year as the company invested in connecting fiber networks to homes and the mobile business.
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