Telkom earnings fall as mobile sales slow, costs rise

Customers are served at a branch of Telkom in Johannesburg on 2 March 2022. Reuters/Siphiwe Sibeko/File Photo

The majority state-owned operator said its headline earnings per share — the main profit measure in South Africa — fell to 137.2c in the six months ended 30 September, down from 285.5c a year ago.

Group earnings before interest, tax, depreciation and amortisation (EBITDA) fell 17.3% to R4.9bn ($283.98m), while group operating revenue inched down by 0.7% to R21.2bn.

"The period was characterised by strained economic conditions placing consumers under pressure and an intensely competitive landscape," group chief executive officer Serame Taukobong said.

At the same time, the group continued to manage the transition from legacy fixed voice and copper-based services to newer technologies. "However, this migration impacted our revenue growth and overall profitability," Taukobong added.

Its mobile business saw service revenue inching down 0.7% to R8.8bn on financially constrained pre-paid consumers, while its fixed service revenue fell by 9.8% due to the migration. Information technology sales rose 16.5% as corporates revived spending.

Telkom, whose mobile business is the third-largest in the country, also saw direct costs increasing, driven by materially higher handset and equipment costs, its CEO said.

"While the rest of the operating costs were well managed, energy costs increased significantly due to the sustained load shedding (rolling power cuts) during the period," he added.