Johannesburg - Shares of South Africa's Telkom SA hit their highest in 20 months on Tuesday, after the fixed-line operator said first-half earnings likely rose more than 20 percent, the latest sign a turnaround at the struggling company is gaining traction.
Telkom has been battered for years by falling profits thanks to stiff competition from mobile operators MTN Group and Vodacom, which it previously owned.
It was also hurt by an expensive failed attempt to expand into Nigeria and a revolving door of chief executives.
Chief executive Sipho Maseko became the sixth chief executive since 2005 when he took over in April this year.
But Maseko appears to be convincing investors he is getting the company back on track.
In June Telkom wrote down the value of its network by 12 billion rand ($1.2 billion).
It has also settled some long-standing regulatory disputes.
The stock has risen 82 percent since his appointment, although it is still at less than half of its 2007 high.
Telkom, in which the government and the state pension fund hold a combined stake of just over 51 percent, said in a statement on Tuesday headline earnings for the six months to end-September likely rose more than 20 percent, after the previous year's results were hit by a regulatory fine.
Earnings were also helped by lower finance charges, it said.
Headline earnings, the main measure of profit in South Africa, exclude certain one-time items.
Shares of Telkom rose 4.2 percent to 27.60 rand after earlier hitting 27.99 rand, the highest since February 2012.
The stock rose more than 5 percent on Monday, on news South Africa's telecoms regulator planned to cut by 75 percent the fees mobile operators can charge rivals to use their networks.
The lower fees are a negative for major mobile players such as Vodacom and MTN, although investors expect them to benefit smaller players such as Telkom and unlisted mobile operator Cell C.
Telkom is due to release its interim results on or around November 18. - Reuters