Telkom reports stronger revenues

Johannesburg - Local telecom company Telkom has reported stronger revenues but weaker profit after tax, according to its annual results for the period ending March 31 2015.

Telkom’s net revenue increased 3.1% during the period to R26bn.

The company further added that its group operating revenue increased 1.2% to R31.675bn, up from R31.288bn for the year ending March 2014.

The company said its increased revenues were driven by higher mobile voice and data revenue, higher IT Business Services revenue and higher equipment sales.

However, Telkom has also recorded lower profit after tax.

“The group recorded a profit after tax of R2.9bn (March 2014: R3.6bn). This is 19.5% lower than the previous year and was driven by a one-off R2.169bn net gain recognised on the curtailment of the post-retirement medical aid liability included in the comparative reporting period as well as retrenchment, voluntary early retirement and severance package costs of R591m for 1 205 employees in the current year,” Telkom’s results read.

Despite the fall in profit after tax, Telkom said that its earnings before interest, taxation, depreciation and amortisation (Ebitda) rose by 15.1% to R9bn.

The company further said its headline earnings per share grew 60% to 532.5 cents, its Ebitda margin was recorded at 28.3% and its group debt was reduced by 92.8% to R151m.

Other key financial results from the company include that its group operating expenses, excluding depreciation, fell by 1.2% for the period to R17.7bn.

The company also said that a dividend of 245 cents per share will be paid to shareholders.

“We set out to achieve further stability in the business and largely attained it under challenging conditions,” said Sipho Maseko, Telkom’s group chief executive officer.

“We are nearing the completion of the stability phase of our turnaround, which included a de-risking of the mobile business, strengthening of our balance sheet with the settlement of the post-retirement medical aid liability for certain pensioners and addressing our fixed asset base.

"We have been able to maintain good cash management with free cash flow at R3.9bn and a low gearing ratio with very low net debt to enable us to be nimble as we move ahead with plans to grow our revenues organically and inorganically,” said Maseko.

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