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Cape Town - Telkom has reported an after tax profit fall of 25.4% following its application of severance packages for employees in its annual results announced on Monday.
The telco, though, said that its earnings before interest, tax and amortisation (Ebita) was up by 16.1% and reported an Ebitda margin of 29.3%.
Operational revenue increased 13.9% to R37.3bn
However, these results exclude the impact of voluntary severance packages of R2.193bn and the related tax impact of R517m.
Subsequently, after tax profit plunged 25.4% to R2.4bn as a result of the voluntary early retirement and severance packages for 3 878 employees.
Mobile growth
“I am very pleased with what we have achieved despite the challenges we encountered over the period. Our solid performance demonstrates the strong execution capability we have developed over our turnaround journey,” said Group chief executive officer Sipho Maseko.
Group net revenue increased 4% to R28bn and mobile was the “star performer” for Telkom, reducing a R2.2bn loss in 2013 to a R43m loss.
Data revenue increased 59.4% and mobile traffic on the network jumped 72% as Telkom reported mobile prepaid subscribers increasing from 1.6 million in 2015 to 1.9 million in 2016.
Contract subscribers increased from 579 125 to 794 272 over the period.
“With the increasing demand for high speed broadband in mind, we aim to grow our broadband penetration through our fixed-line lookalike LTE services and will continue to invest in this service by re-farming our 1 800MHz spectrum to offer a fully mobile LTE service to our smartphone customers,” said Maseko.
The company reported LTE 1 448 LTE (higher speed Long Term Evolution) mobile sites and an additional 2 663 mobile sites on its network.
The company reduced its employee head count from 18 333 in 2015 to 13 766 in 2016. That reduced its wage bill from R8.7bn to R7.9bn.
The company’s R2.7bn investment into BCX resulted in a 29.2% increase in data revenue as a result of IT services.
Normalised headline earnings per share at Telkom increased 15.5% to 658c.
