South African operator Telkom reported a 1.5 percent decline in its half-year revenue to ZAR 16.1 billion. The fixed-line business recorded a 3.1 percent fall in revenues to ZAR 14.9 billion, while the contribution from mobile nearly tripled compared to a year earlier to ZAR 898 million. The EBITDA margin fell to 22.5 percent from 26.9 percent, and pretax profit declined 48.9 percent to ZAR 547 million. Basic earnings per share decreased 64.5 percent to ZAR 0.302, and headline EPS from continuing operations fell 80.6 percent to ZAR 0.372. Profits were down due to a provision for a competition fine, higher employee expenses due to annual salary increases and lower fixed-line revenue. Active subscribers at its mobile unit 8ta grew 50.4 percent year-on-year to 1.49 million at the end of September, generating ARPU of ZAR 68.62 each, up 3.4 percent. ADSL subscribers increased 5.8 percent to 841,831, while the number of fixed access lines fell by 4.4 percent to 3.89 million. Capex increased 17.6 percent from a year earlier to ZAR 2.12 billion, driven by upgrades to fixed broadband and mobile backhaul, and free cash flow was up 3.9 percent to ZAR 1.51 billion. Telkom said it would focus on maintaining cash flow to fund investments internally. It's also still in talks with government on its strategic direction, after an earlier attempt to cooperate with Korea Telecom was blocked by its major shareholder.
