Telkom revenue falls as mobile growth slows

Telkom has published its annual results for the fiscal year ended March 31, 2022, showing that its revenue decreased compared to 2021.

The telecommunications company posted revenue of R42.76 billion, 1.1% below the R43.22 billion it posted for its financial year ended March 31, 20221. increased from R2.4 billion to R2.6 billion.

Telkom blamed the performance on several factors, including a “sluggish” economy, global supply chain challenges and chip shortages.

“The year was characterized by the prolonged effects of the Covid-19 pandemic on certain economic sectors, an extremely competitive landscape, volatile capital markets and significant regulatory developments,” Telkom said.

“The impact of post-pandemic recovery is still evident in the difficult performance of small and medium-sized businesses.”

The company said competition is intensifying in the mobile sector, where it must continue to innovate to protect its value proposition.

It still managed to increase mobile service revenue by 3.3% year-on-year to R17.51 ​​billion.

However, gains in this area were offset by a 9.7% drop in fixed service revenues, from R15.12 billion to R13.65 billion.

The company’s wholesale fixed broadband division, Openserve, has bled copper-based fixed customers over the past decade, with fiber replacing DSL as the preferred home and business connection.

Openserve Infrastructure in Midstream Estate

Telkom said that despite lower revenue, its underlying group profit before interest, tax and deductibles (EBITDA) remained relatively stable – down 0.5% to 11.91 billion rand.

The company’s underlying overall earnings per share (HEPS) and basic earnings per share increased 2.5% and 1.4%, respectively.

Telkom also reported lower capital expenditure (capex) than the previous year, with R7.48 billion spent compared to R8.45 billion.

Due to spending of R2.1 billion on spectrum acquired at the recent high-demand Icasa spectrum auction, Telkom expects its capex-to-revenue ratio to reach 20% over the course of the year. 2023 and normalizes to a level of sustainable capital investment of 16 to 18%. after.

Telkom summarized the main characteristics of his group as follows:

  • Declining turnover 1.1% to R42.8 billion
  • Stable EBITDA (down 0.5%), with a margin extended to 27.9%
  • HEPS and BEPS on the rise 2.5% and 1.4%, respectively
  • Active mobile subscribers on the rise 10.5% to 16.9 million
  • Mobile broadband customers at 10.7 million
  • The houses are passed with the fiber 52.7%
  • Fiber-to-the-home connectivity rate at 46.3%

The relative changes in EBITDA and earnings exclude the impact of R270 million from redundancies, voluntary early retirement, voluntary departures and the related tax impact of R76 million in the comparative year.

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Casey J. Nelson