Telkom first-half profit jumps 41%

Telkom is the best performing telecommunications company on the JSE. (Delwyn Verasamy, M&G)

Telkom is the best performing telecommunications company on the JSE. (Delwyn Verasamy, M&G)

Telkom SA, Africa's largest fixed-line operator, said first-half profit excluding one-time gains rose 41% to R773-million after the rand weakened and payments to wireless operators fell.

Profit including one-time items such as a gain from medical aid liability was R2.95-billion in the six months through September, the Pretoria-based company said on Monday. Revenue was little changed at R16.2-billion.

Payments to other phone companies fell 18% after the cost of ending calls on other networks, known as mobile termination rates, decreased, the company said. "The group's financial performance indicates a challenging industry environment," chief executive Sipho Maseko said.
"Despite a considerable increase in the group's earnings, owing to several once-off items, underlying operational earnings remain under pressure."

Telkom, which is 40% owned by the South African government, last month suspended chief financial officer Jacques Schindehutte over allegations of personal misconduct. Telkom may have breached compliance regulations relating to the Companies Act after it gave Schindehutte an interest-free loan of R6-million to buy shares, the company said on Monday.

Telkom is the best performing telecommunications company on the JSE in 2013, gaining 59% compared with 11% for MTN Group and 4.2% Vodacom Group.

The rand is the worst 2013 performer of 16 major currencies tracked by Bloomberg, falling 17% against the dollar. – Bloomberg

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