Telkom suspends dividend, to invest in mobile business

News Broadband South Africa 11 JUN 2012
Telkom suspends dividend, to invest in mobile business
South Africa operator Telkom reported a net loss of ZAR 78 million for its fiscal year to March 2012, versus a profit of ZAR 1.26 billion a year earlier. Operating revenue decreased by 0.7 percent to ZAR 33.1 billion, while operating expenses rose 6.1 percent to ZAR 31.3 billion. EBITDA was down 8.8 percent to ZAR 8.5 billion, including a loss of ZAR 2.2 billion on the 8ta mobile business. The results also include a ZAR 896 million loss on the disposal of Multi-Links in Nigeria and a ZAR 569 million impairment loss of the unit iWayAfrica's goodwill and assets. Headline earnings per share, which exclude the one-time items, declined 33 percent, mainly as a result of losses from 8.ta and additional depreciation. 

Telkom faced a continued erosion in the traditional fixed-line business, with fixed-line revenue down 2.8 percent to ZAR 30.6 billion, amid a fall in voice traffic and price pressure on data services. The number of fixed lines fell 3.8 percent over the year to 3.995 million, and fixed traffic was down 5.7 percent to 19.4 billion minutes. ADSL subscribers were up 10 percent to just over 827,000. 8ta finished March with 1.483 million active customers, of which 40 percent were now using voice as well as data. Mobile ARPU was ZAR 68.86.

The company said it will not pay a dividend, in order to save cash for capital expenditure. The mobile business is expected to invest ZAR 2.0-2.5 billion this year, while reducing EBITDA losses by 20 percent. Total capex this year will be 20-25 percent of revenues, and the company plans to invest ZAR 18-22 billion over the next three years, allowing its net debt to rise to as much as 1.4 times EBITDA. Telkom's free cash flow totaled ZAR 2.1 billion last year. The company also announced plans to "rationalise" its African busines, saying that while a footprint in Africa is "desirable", this can't come "at any cost" to its core business. 

Categories:

Fixed,  Mobile

Companies:

Multi-Links,  Telkom

Countries:

South Africa

Tags:

Voice services, Financial figures, Internet Access

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