Telkom South Africa said group revenue was flat at ZAR 21.29 billion in the fiscal first half ended 30 September, compared with ZAR 21.39 billion in the same period in 2020. Mobile revenue increased by 9.7 percent despite the Covid-19 bump in the prior period as a result of the stringent lockdown alert level. Group EBITDA grew faster than revenue with an increase of 1.2 percent to ZAR 5.98 billion, and the EBITDA margin expanding by 0.5 percentage points to 28.1 percent from 27.6 percent in 2020.
The company said the result was underpinned by an effective, sustainable cost management programme, which aims to contain opex growth below inflation and optimise costs to serve. Opex declined by 3.1 percent year on year despite an average group-wide salary increase of 6 percent from 01 April.
HEPS increased by 30.4 percent to ZAR 2.85, and BEPS increased by 27.3 percent to ZAR 2.77. This was mainly due to a significant decline in finance charges and fair value movements compared with the prior period, as well as higher group EBITDA.
Capital investment rose by 22.7 percent to ZAR 3.61 billion, representing a capex to revenue intensity of 17.0 percent. The network roll-out in the prior period was hit by the lockdown in the first quarter of the prior year.
Telkom's IT services company, BCX, was the hardest hit by the challenging environment, as it serves every sector of the economy. Revenue declined by 6.1 percent to ZAR 7.46 billion. The IT business remains under pressure due to the lingering impact of the lockdown, global supply chain constraints and shortages of semiconductors.
Wholesale division Openserve continued to stabilise with its topline revenue, which was down by 1.8 percent to ZAR 6.72 billion, supported by the fibre ecosystem, including fibre to base stations and fibre to the business. From a FTTH perspective, the number of homes passed increased by 54.2 percent to 707,399, and the number of homes connected with fibre increased by 34.3 percent to 331,735. This is higher than the number of homes connected with copper, at 230,817.
Swiftnet continued to commercialise its masts and towers business, with revenue increasing by 7.3 percent to ZAR 674 million, supported by a rising productive portfolio tenancy ratio. Telkom will focus on expanding topline revenue and profitability in the second half of the year. It will exercise discipline in capital expenditure and focus on initiatives to improve cash generated from operations.
