Telkom Group’s interim results show revenue declined by 0.7%November 24, 2022
Telkom Group’s CEO Serame Taukobong has confirmed that revenue was at R21 150 million, a marginal decline by 0.7% compared to the same period last year.
Telkom on Thursday announced its interim results for the six months ending 30 September 2022.
He said that the group’s earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 17.3% to R4 942 million, with the EBITDA margin contracting by 4.7 percentage points to 23.4%.
The telecommunication company also announced a 52% decline in headline earnings for the six months. No dividends were declared for this year, in line with its 3-year suspension policy.
Direct cost increases
Taukobong explained that direct costs increased and this was driven by higher handset and equipment costs.
“While the rest of operating costs were managed well, energy costs increased significantly due to the sustained load shedding during the period. This resulted in increased cost base,” he said.
Performance was also boosted by lower foreign exchange and fair value movements and tax expenses compared to the prior period.
Rocky economic period
Taukobong said that the period over which the results was measured was characterised by strained economic conditions. He said that the group’s performance suffered under the sluggish economy, the energy crisis with rolling blackouts and consistent fuel price hikes as well as the high interest rate cycles. He said these factors severely constrained consumer spending.
Taukobong did, however, have good news around product and service stats. “We saw good growth in our mobile subscriber base, sustained growth trajectory in the fiber market and corporates reviving spending on their IT infrastructure,” he said.
The Mobile business continued to drive growth in Telkom Consumer. Total Mobile revenue grew marginally by 0.5% as the product mix evolved towards longer post-paid contracts.
“We grew our pre-paid market by 10.7% to 15.2 million. In the post-paid market, the post paid base increased by 11.7% to 2.9million while the average revenue per user reduced to R206.
“We refreshed our post-paid wireless broadband portfolio to significantly improve our value offering in the capped and unlimited plans. We were rewarded as our mobile broadband subscriber base increased by 3.7% to 11 million customers,” he said.