Sharp drop in Telkom profits

2012-11-19 08:11

Johannesburg - Telkom [JSE:TKG] has reported an 80.6% decline in headline earnings per share for the six months ended September 2012 to 37.2 cents from 191.7c in the previous period.

Group profit before tax declined 48.9% to R547m‚ mainly due to the impact of the provision for the penalty imposed by the Competition Tribunal‚ higher employee expenses due to annual salary increases and lower fixed-line revenue‚ partially offset by lower mobile termination rates and no impairment charge.

"Revenue continues to reflect the impact of fixed mobile substitution that has become more prevalent over the last few years being partially offset by growth in revenue from our own mobile offering and limited revenue growth in fixed-line data. Lower prices on data due to competitive offerings continue to negate the volume growth experienced in this area‚” it said.

"The results for the half-year to September 2012 reflect the on-going challenging environment for fixed-line incumbents‚ it noted.

Revenue declined marginally by 1.5% to R16.1bn with the pressure experienced in the traditional fixed-line business through lower fixed- line traffic revenue being partly offset by the growth of mobile revenue.

"We are encouraged by the improvement in the mobile business‚ which showed a 198.3% improvement in revenue largely as a result of increased ARPUs and number of revenue generating subscribers," said the fixed line operator.

"Operating expenses increased 1.6% to R15.6bn due to the provision for the penalty imposed by the Competition Tribunal. Our margins declined from 26.9% to 22.5% compared to the prior reporting period.

"While the industry landscape remains challenging for the Group we are determined to strengthen our competitiveness‚ improve our operating model and carefully manage our financial resources. Our focus will remain on utilising internally generated funding for capital expenditure planned over the next year‚" it said.

  • bruce.williams.1044186 - 2012-11-19 08:23

    Increased salaries and employee expenses. Government run companies are raising their salaries and JZ said that privately owned customers must not take an increase. That is a bit ironic. These people seem to find miraculous excuses to pay themselves more with our money.

      charlesbronson.bronson - 2012-11-19 08:43

      Governments fault. Useless bafoons. Sell all our shares before it reach R3 per share!

  • honey.deelishus - 2012-11-19 08:26

    Yay! Let's bleed Telkom dry like everything else we BEE manage - Increase salaries for exec's, golden handshakes, bad management and Crony appointments - with a bit of luck, we'll be able to get a Government (my taxes, your taxes) bail out to keep us afloat! What a total co(k-up!

  • alex.gush.3 - 2012-11-19 08:26

    eish I cant get given a monopoly and you still screw it up. hahaha

  • jeanettehandrey.duplessis - 2012-11-19 08:28

    I would like to know what Telkom's plans are for rural areas and the upkeep of their network in these areas. As things are now the moment we have cellphone reception our Telkom contract will be terminated. It will be a very happy day that will be celebrated because their service is terrible!

  • mark.singh.9889 - 2012-11-19 08:37

    Time for telkom to go. they have milked this country enough

  • colin.dovey - 2012-11-19 08:42

    Not surprising is it that a website was established for this poor performer called "Hellkom" so that people can complain about poor service. Just dialling 10210 was enough to put anybody off - I checked the number and they have JUST changed the voice....I wonder why?

  • theo.schoeman.71 - 2012-11-19 08:42

    Its very simple - THEY JUST DON'T GET IT RIGHT EVER !! All the excuses why it is not profitable but NEVER any solutions. And so the one CEO after the after take over the reigns just to screw it up even more. But don't worry BEE is the answer to all the problems Lol

      rajesh.sukha - 2012-11-19 09:25

      telkom is rife with white old guard employees...BEE is not the reason this entity is still stuck in the dark ages. Those top manangers- are mostly white.

      theo.schoeman.71 - 2012-11-19 09:41

      @rajesh.sukha - Get your facts right. Only 9% of management posistions in Telkom is white. Its BEE no matter how you want to look at it or what you want to call it. No diiference whats been happening to SAA, SABC and many many more. Face the facts and stop denying

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