Telecommunications company Telkom has increased its revenue by 1.9% to R21.3 billion, with mobile service revenue increasing by 10% and fibre data service revenue going up by 15.5%.
The JSE-listed Telkom today announced its interim financial results for the six months ended 30 September.
Subsidiaries BCX and Openserve also posted strong results during the period. According to Telkom, BCX’s IT services revenue increased by 1.9%. Openserve’s fixed broadband traffic increased by 28.5%, while group fibre data service revenue increased by 15.5%, says the firm.
Telkom’s group adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) went up by 18.3%, to R5.6 billion, demonstrating improved operating leverage.
It posted group adjusted EBITDA margin of 26.2%, a 3.6% increase from the prior period, reflecting ongoing broad-based cost optimisation initiatives, says the group.
Free cash flow remained positive at R768 million, benefiting from strong operating cash generation, it adds.
The balance sheet strengthened, with interest-bearing debt reduced by R885 million to 1.3x net debt to adjusted EBITDA, down from 1.8x as at 31 March 2024.
Serame Taukobong, Telkom group CEO, says the interim results show consistent execution of the data-led strategy driving further profitable growth.
“The results for the six months ended 30 September 2024 demonstrate a robust and steady underlying operational performance, building on the progress made in the previous year,” says Taukobong.
“We continued to monetise our diverse infrastructure asset base to build a strong cash-generating business for the long-term. Simultaneously, we progressed the disposal of non-core assets to invest in future growth.”
He explains that group revenue grew by 1.9%, within guidance, driven by continued strong demand for “compelling” data propositions, with mobile service revenue growing by 10%, fibre data service revenue increasing by 15.5% and IT services revenue up by 1.9%, offsetting ongoing fixed voice and legacy data erosion.
“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. In line with our connect-led strategy for our fibre assets, we maintained a high market-leading home connection rate of 49.7% for the period.
“We continue to deploy our data-led strategy, pivoting from voice, driving data growth and ensuring future-readiness.”
The results show Telkom Consumer’s mobile subscribers are now at 22.8 million, with a 19.6% upsurge in its mobile data subscriber base to 14.6 million. It adds that mobile data traffic increased by 25.7%.
Gyro progressed on the disposal of the masts and towers business, Taukobong adds, noting the company received proceeds of R204 million from the disposal of non-core properties.
“While we face challenges, such as high unemployment rates and the need for economic growth to support our connectivity businesses, we are encouraged by positive signs in South Africa, including lowering interest rates and moderating inflation,” he states.
“Looking ahead, the strength of our balance sheet remains a top priority, ensuring we stand resilient in the face of challenges. We will endeavour to maintain into the second half of the year the good momentum we have experienced so far, which is pointing towards a sustained trend of positive free cash flow.
“It is important to emphasise that our focus on efficiency drivers is not solely about reducing workforce numbers, but rather about optimising performance across the board. We are actively reshaping the business construct without compromising our core strengths,” Taukobong concludes.
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