Wrap Text
Interim Results for the six months ended 30 September 2024
Telkom SA SOC Ltd
(Registration number: 1991/005476/30)
JSE share code: TKG
JSE bond code: BITEL
ISIN: ZAE000044897 (Telkom, the Company or the Group)
Interim Results for the six months ended 30 September 2024
Group highlights for continuing operations
- Group Revenue(1) up 1.9% to R21 382 million, with mobile service revenue increasing by 10.0% and
fibre data service revenue increasing by 15.5%
- Group adjusted EBITDA(2,3,4) up 18.3% to R5 606 million, demonstrating improved operating leverage
- Group adjusted EBITDA margin(2,3,4) of 26.2% a 3.6 percentage points increase from the prior period,
reflecting ongoing broad-based cost optimisation initiatives
- Free Cash Flow remained positive at R768m benefiting from strong operating cash generation
- Balance sheet strengthened with interest-bearing debt reduced by R885 million to 1.3x net debt(3)
to adjusted EBITDA(2,3,4) (down from 1.8x as at 31 March 2024)
- Positive outlook for FY2025, supported by effective execution of OneTelkom data-led strategy
Summary of financial results for total operations
Financial indicators Reported Reported Reported Adjusted(4) Adjusted(4)
R'millions H1 FY2025 H1 FY2024 % change H1 FY2025 % change
Revenue(1) 21 795 21 346 +2.1
Continuing 21 382 20 975 +1.9
Discontinued(5) 413 371 +11.3
EBITDA(2,3) 5 129 5 025 +2.1 5 907 +17.6
Continuing 4 828 4 737 +1.9 5 606 +18.3
Discontinued(5) 301 288 +4.5 301 +4.5
Profit for the period 1 071 976 +9.7 1 639 +67.9
Continuing 853 788 +8.2 1 421 +80.3
Discontinued(5) 218 188 +16.0 218 +16.0
Earnings per share (cents) 217.6 200.2 +8.7 333.3 +66.5
Continuing 173.2 161.5 +7.2 288.9 +78.9
Discontinued(5) 44.4 38.7 +14.7 44.4 +14.7
Headline earnings per share (cents)(3) 191.5 195.0 (1.8) 307.2 +57.5
Continuing 146.9 156.3 (6.0) 262.6 +68.0
Discontinued(5) 44.6 38.7 +15.2 44.6 +15.2
Dividend - - - - -
1 Revenue was restated for the IFRS 15 prior period error.
2 Earnings before interest, tax, depreciation and amortisation.
3 This is a non-IFRS financial measure.
4 Adjusted financial measures exclude the impact of the R160 million restructuring cost,
and the Telkom Retirement Fund derecognition loss of R618 million.
5 Swiftnet continues to meet the IFRS 5 requirements and is classified as held for sale
and is therefore excluded from the results from continuing operations.
Operational and commercial performance
- Solid revenue growth driven by demand on the compelling data propositions
- Cost optimisation initiatives yielding results
- Significant improvement in net debt to EBITDA
- Sustained positive free cash flow
- Telkom Retirement Fund successfully converted to defined contribution fund
- Divestiture of non-core assets - property disposals
- Smart capex investment and monetisation of our infrastructure
- Good progress on the disposal of Swiftnet
Message from Serame Taukobong, Group CEO
Consistent execution of data-led strategy driving further profitable growth
The results for the six months ended 30 September 2024 demonstrate a robust and steady underlying
operational performance, building on the progress made in the previous year. We continued to monetise
our diverse infrastructure asset base to build a strong cash-generating business for the long term.
Simultaneously, we progressed the disposal of non-core assets to invest in future growth.
Group revenue(1) grew by 1.9%, within guidance, driven by continued strong demand for our compelling
data propositions with mobile service revenue growing by 10.0%, fibre data service revenue increasing
by 15.5% and IT services revenue up by 1.9%; offsetting ongoing fixed voice and legacy data erosion.
Our next-generation broadband offerings, enabled by ongoing capital investment in our networks, have
positioned Telkom as the best-value mobile network in South Africa. In line with our connect-led strategy
for our fibre assets, we maintained a high market-leading home connection rate of 49.7% for the period.
Data-led strategy in action
We continue to deploy our data-led strategy, pivoting from voice, driving data growth and ensuring
future-readiness.
Telkom Consumer
- Mobile service revenue increased by 10.0%
- Mobile subscribers now at 22.8 million
- 19.6% upsurge in our mobile data subscriber base to 14.6 million
- Mobile data traffic increased by 25.7%
Openserve
- Fixed broadband traffic increased by 28.5%
- Group fibre data service revenue increased 15.5%
BCX
- IT services revenue increased by 1.9%
Gyro
- Progressed on the disposal of the masts and towers business
- We received proceeds of R204 million from the disposal of non-core properties
Outlook
While we face challenges such as high unemployment rates and the need for economic growth to support our
connectivity businesses, we are encouraged by positive signs in South Africa, including lowering interest
rates and moderating inflation.
Looking ahead, the strength of our balance sheet remains a top priority, ensuring that we stand resilient
in the face of challenges. We will endeavour to maintain into the second half of the year the good momentum
we have experienced so far, which is pointing towards a sustained trend of positive free cash flow. It is
important to emphasize that our focus on efficiency drivers is not solely about reducing workforce numbers
but rather about optimizing performance across the board. We are actively reshaping the business construct
without compromising our core strengths.
Mvuleni Geoffrey Qhena Serame Taukobong Group Nonkululeko Dlamini Group
Chairman Chief Executive Officer Chief Financial Officer
18 November 2024
Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Pro forma financial information: The Group presents various non-IFRS financial measures in the results announcement.
These non-IFRS financial measures include i) the net debt and ii) the free cash flow. In addition to the non-IFRS
financial measures noted above, the financial information in the current period excludes the impact of restructuring
costs as well as the loss with the derecognition of the Telkom Retirement Fund (TRF) and the related tax impact on the
results. These measures constitute pro forma financial information and are annotated throughout the results
announcement. The pro forma financial information was presented to illustrate the impact of the pro forma adjustments
on the reviewed condensed consolidated interim financial statements for the six month periods ended 30 September 2024
and 30 September 2023 to achieve a comparable year-on-year analysis and show the underlying performance of the
business. The pro forma adjustments were determined in terms of the Group accounting policies disclosed in the reviewed
condensed consolidated interim financial statements for the six month period ended 30 September 2024.The pro forma
financial information is the responsibility of the Directors.
Further information: The short-form interim financial results announcement is the responsibility of the Board of
Directors of Telkom. It is only a summary of the information contained in the full interim financial results
announcement for the period ended 30 September 2024 and does not contain full or complete details.
Any investment decisions should be based on the full interim financial results announcement published on the JSE's
cloud link on Monday, 18 November 2024 and also available on Telkom's website.
The full interim financial results announcement, on which the Group's external auditor, PricewaterhouseCoopers Inc.
has issued an unmodified review report, is available on the Company's website at:
https://group.telkom.co.za/ir/financialinformation.html and on the JSE's cloud link at:
https://senspdf.jse.co.za/documents/2024/jse/isse/TKG/ie2024.pdf Copies of the Telkom interim financial statements
for the six month period ended 30 September 2024 may be requested from our Group Company Secretary, Ephy Motlhamme
at motlhae@telkom.co.za
Transfer secretaries are Computershare and they are contactable on +27 11 370 5000.
www.telkom.co.za
Date: 18-11-2024 07:15:00
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