subscribe: Daily Newsletter

 

Telkom set up for growth

0 comments
Telkom set up for growth

Telkom SA has announced a 15,5% increase in normalised headline earnings for the year ended 31 March 2016, marking the conclusion of a successful three-year turnaround strategy implemented in 2013.
Normalised profit after tax reached R4-billion, compared to R3-billion for the previous period.
Telkom Group CEO Sipho Maseko says: “Our strong performance demonstrates the sound execution capability we have developed over this turnaround journey and lays a solid foundation for future growth.”
The mobile business has delivered a star performance during this phase, reducing its EBITDA loss from more than R2-billion three years ago to R43-million this year. Since the fourth quarter, the mobile business has been breaking even on a monthly basis.
Operating revenue grew 14% to R37-billion with net revenue up 4%, boosted by the inclusion of Business Connexion (BCX) in the group consolidation and solid performance from the company’s data services.
The performance was partially offset by a 2% decline in voice and subscriptions revenue as voice usage continued its downward trend and customers continued to substitute mobile services for fixed lines.
Telkom responded to this trend by migrating customers from legacy services such as fixed-line voice to bundled, converged, and next generation data products where demand is strongest.
During the year, 3 878 employees accepted voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs) and a further 437 employees were affected by outsourcing. As a result, Telkom company employee expenses reduced by 10%.
“We have been mindful to retain key skills and attract new talent, especially scarce and business critical skills. Our investment in training and development is key to our efforts to transform our culture and ensure that we achieve our strategic objective of equipping our employees with the appropriate skills and experience to put our customers first in a very competitive ICT environment. We are well underway with our culture shaping programme, which began with the leadership. We believe our efforts in this regard will have a positive impact on all our employees, increasing both productivity and internal brand commitment,” says Maseko.
Capital outlay increased by 17% to R6-billion as the group invested in key priority areas which include fibre, LTE and mobile, IT systems, maintenance and rehabilitation as well as service on demand.
“In the year ahead, an aggressive fibre rollout is our number one priority, while simultaneously deploying our other capital resources as we focus on revenue generation and cost efficiency to grow earnings,” says Maseko.
During the year, Telkom announced its intention of implementing a more flexible and agile operating model. Towards this end, it launched Openserve, the network and wholesale business. This will improve accountability and allow each business unit to compete effectively with its peers.
“In conclusion, having completed the turnaround phase of our strategy, we are embarking on the next phase, where our bias is to growth as we focus on implementing our new operating model. Customer service will continue to be part of our strategy, as will implementing the right processes and systems to enable and empower our employees to contribute towards improved customer centricity,” says Maseko.
The board declared a dividend of 270 cents, up 10% on the previous year’s total dividend.