South Africa-based Telkom Group said its net profit for the year ended 31 March reached ZAR 1.58 billion. Group EBITDA improved by 3.8 percent to ZAR 8.4 billion from ZAR 8.1 billion a year earlier. Headline earnings per share from continuing operations, excluding once-off items, increased 35.1 percent to ZAR 3.88 from the previous year, while basic earnings per share increased to ZAR 2.852 from ZAR 2.685. In line with its guidance to stabilise revenues, the firm achieved revenue growth of 1.1 percent to ZAR 32.5 billion for the year, confirming that Telkom still face significant challenges largely as a result of the continued pressure on voice revenue, resulting from fixed-to-mobile substitution.
The group's results are affected by the following significant once-off items: a ZAR 2.169 billion net curtailment gain recognised on the post-retirement medical aid liability and ZAR 246 million related tax benefit on the ZAR 878 million settlement of the post-retirement medical aid liability; ZAR12 billion asset impairment included in the 2013 financial year; ZAR434 million cost relating to voluntary severance and early retirement in 2013; and a ZAR 592 million provision for the Competition Commission fine included in 2013.
Its number of ADSL subscribers increased by 6.5 percent to 926,944. The amount of managed data network sites rose 6.3% to 47,125. The number of mobile sites integrated went up by 22.3 percet to 2,428, with 1,183 LTE sites integrated.
Fixed-line voice and interconnection revenue decreased by 7.4 percent to ZAR 9.4 billion and fixed-line data revenue dropped by 1.1 percent to ZAR 10.3 billion. Mobile revenue increased 72.7 percent to ZAR 2.347 billion and mobile data revenue grew 80.2% to ZAR 656 million. Calling plan subscribers increased by 1.3 percent to 867,874 and active mobile subscribers increased 17.6 percent to 1,803,675 with a blended ARPU of ZAR 62.79
The group said it aims successfully to conclude its proposed MTN South Africa and Business Connexion (BCX) transactions within the current financial year, enabling it to offer fully converged services to customers. Telkom's turnaround depends largely on improving customer service. While Telkom has managed to improve its ratings in various customer surveys, decisions must be guided by customers' needs to evolve the business further.
Telkom expects to see continued pressure on fixed-line voice revenues, intensified by strong competition, a challenging macro-economic environment and effects of regulatory changes.
