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Johannesburg - Telkom SA reported an expected 35% jump in full-year headline earnings on Friday, but warned revenues from its landline business would be under pressure.
Telkom said headline earnings excluding one off items rose to 388 cents per share for the year ended March 31.
Telkom said it was still facing shrinking revenues and climbing costs due to operating in a highly competitive environment.
Revenue crept just 1% higher to R32.5bn.
"These results confirm that we still face quite a lot of headwinds ahead of us, largely driven by the pressure on our fixed-line revenues," CEO Sipho Maseko told reporters.
Fixed-line revenue decreased by more than 7% to R9.4bn, but income from its mobile business jumped more than 70%.
Total revenue was boosted by a number of one-off items such lower depreciation charges - the previous year's earnings were weighed down by a R12bn writedown - and by a tax benefit of R246m.
It also had a gain of more than R2.1bn related to a retirement medical aid liability.
"There is a heck of a lot of adjustments that have been made in these numbers, so its pretty difficult to see where the actual growth is," said Reuben Beelders, portfolio manager at Gryphon Asset Management in Cape Town.
However, there were now signs of some operational improvement, he said. Many customers and analysts see the company as bloated and inefficient.
Operating expenses fell more than 2% to R18.2bn, partly from cutting back employee head count by 9.5%.
Telkom intends to shrink management layers to save R1% in expenses each year over the next five years by reducing the ratio of staff costs to revenue to 28%, from 30% currently.
Telkom shares were down more than 1% shortly after the stock market opened in Johannesburg, but have gained 50% so far this year.
The Business Connexion Group (BCX), whose leader Benjamin Mophatlane had passed away, said in a statement on Friday that BCX and Telkom are currently pursuing a transaction.
"Out of respect to the memory of Benjamin Mophatlane and his family, Telkom and BCX have jointly agreed to suspend current activities pursuant to the transaction during the mourning period," BCX said.
Both organisations remain committed to the transaction and will recommence the process in due course.
The Takeover Regulation Panel has granted an extension for the posting of the circular relating to the transaction until July 11 2014.
Telkom said headline earnings excluding one off items rose to 388 cents per share for the year ended March 31.
Telkom said it was still facing shrinking revenues and climbing costs due to operating in a highly competitive environment.
Revenue crept just 1% higher to R32.5bn.
"These results confirm that we still face quite a lot of headwinds ahead of us, largely driven by the pressure on our fixed-line revenues," CEO Sipho Maseko told reporters.
Fixed-line revenue decreased by more than 7% to R9.4bn, but income from its mobile business jumped more than 70%.
Total revenue was boosted by a number of one-off items such lower depreciation charges - the previous year's earnings were weighed down by a R12bn writedown - and by a tax benefit of R246m.
It also had a gain of more than R2.1bn related to a retirement medical aid liability.
"There is a heck of a lot of adjustments that have been made in these numbers, so its pretty difficult to see where the actual growth is," said Reuben Beelders, portfolio manager at Gryphon Asset Management in Cape Town.
However, there were now signs of some operational improvement, he said. Many customers and analysts see the company as bloated and inefficient.
Operating expenses fell more than 2% to R18.2bn, partly from cutting back employee head count by 9.5%.
Telkom intends to shrink management layers to save R1% in expenses each year over the next five years by reducing the ratio of staff costs to revenue to 28%, from 30% currently.
Telkom shares were down more than 1% shortly after the stock market opened in Johannesburg, but have gained 50% so far this year.
The Business Connexion Group (BCX), whose leader Benjamin Mophatlane had passed away, said in a statement on Friday that BCX and Telkom are currently pursuing a transaction.
"Out of respect to the memory of Benjamin Mophatlane and his family, Telkom and BCX have jointly agreed to suspend current activities pursuant to the transaction during the mourning period," BCX said.
Both organisations remain committed to the transaction and will recommence the process in due course.
The Takeover Regulation Panel has granted an extension for the posting of the circular relating to the transaction until July 11 2014.
