Telkom posted a 0,4% rise in first-half headline earnings per share (EPS), lifted by its Vodacom mobile unit and growth in Africa, and said it was eyeing acquisitions.
Telkom said on Monday its headline EPS rose to 745 cents per share for the six months to end-September, as strong growth at Vodacom and at its African businesses helped offset tougher competition and rising costs at its domestic fixed-line unit.
”Those results seem pretty good, because most people were expecting headline earnings to be down,” Rajay Ambekar, telecoms analyst at Cadiz African Harvest in Cape Town, said.
Analysts said they were focusing on how Telkom planned to arrest rising costs at its fixed-line business and pursue growth after it agreed last month to cede control of Vodacom, its main earnings driver, to Britain’s Vodafone.
”We can see there is a lot of margin pressure on the fixed-line business,” Jan Meintjes, a telecoms analyst at Gryphon Asset Management, said.
”The trend points to the fact that they need to reposition themselves.”
Telkom said it planned to expand its data business to offer fully converged services and was looking for acquisition opportunities around the continent to diversify revenue stream.
In a conference call, Telkom chief executive Reuben September said the company was evaluating a number of opportunities to acquire a data centre outside of South Africa and said its newly created Africa consulting unit was poised for growth.
September said the company was close to finalising the disposal of its pay-television unit, Telkom Media, and was looking for investment opportunities around Nigeria and Kenya, Sudan and Angola. He declined to provide specific details.
Telkom is also rolling out a fixed-wireless network, where customers can use cellphones within a restricted area, and has built 38 base stations in Pretoria and Johannesburg. It aims to build 220 operational base stations by March 31.
The company said total revenue increased 9,8% to R29,8-billion. Fixed-line sales rose 2,8% to R16,6-billion and data revenues rose 12,2% to R4,6-billion. Revenue from local traffic on the fixed-line side fell by 11,5% to R1,8-billion.
Headline EPS, which excludes certain non-trading, capital and extraordinary items, is the key profit measure for South African companies. — Reuters