Tough economic environment squeezes Telkom
The company’s fixed-line business was under pressure, more than offsetting the relatively good performance in its mobile business
Telecoms group Telkom on Friday reported a 7.4% drop in first-half headline earnings per share (HEPS) to R3.04, which the company attributed to tough economic environment.
The company said that revenue for the six months to end-September dropped 0.6% to R20.10bn due to deferred corporate information and communications technology (ICT) spend, reduced spend in the public sector and pricing pressures in the wholesale environment.
As a result, net profit slipped to R1.65bn, from R1.76bn in the year-earlier period.
The bigger fixed-line business was under pressure in the review period, more than offsetting the relatively good performance in its mobile business.
The fixed-line service revenue dropped 6.1% to R11.6bn, but mobile service revenue surged 43.2% to R2.3bn as its active subscriber base increased 36% to 4.4-million.
Data revenue was up 9.7% to R6.5bn from a year ago.
"The first half of the year was characterised by a tough economic environment and increased competition," CE Sipho Maseko said in a statement.
"We saw corporate businesses defer their spend on information, communication and technology as a result of an uncertain political, economic and policy environment."
The interim dividend dropped 9.9% to R1.18 per share.
The share price was up 9% to R54.33 in early trade, valuing the company at R28.9bn