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JOHANNESBURG, June 2023 – Telkom SA SOC Limited today announced its Group Annual Results for the year ended 31 March 2023 (FY2023), reflecting the Group's resilience in the face of accelerated loadshedding, low economic growth and a high interest rates.
Despite these conditions, revenue was up by 0.9% to R43 138 million.
Openserve continued its leadership in providing open-access connectivity across South Africa with fixed-data next-generation (NGN) revenue growing by 10.2%, driven by increased rollout of fibre and healthy growth in carrier and enterprise services.
According to Serame Taukobong, Group CEO at Telkom, NGN data-led products, now represent close to 70% of the revenue base.
"We expanded the fibre footprint across all channels, increasing the number of homes passed with fibre by 23.9% and surpassing the 1 million homes mark," he continued.
Homes connected grew by 26.7% to reach 492 812 as the connect-led strategy delivered, maintaining the industry leading connectivity rate of 47.4%.
Telkom Consumerachieved stable revenues at R25 673 million. Mobile service revenue growth of 1.8% was supported by a 7.8% expansion in the total customer base to 18.3 million customers. The post-paid strategy paid off as the post-paid base grew by 11.0% to reach the 3 million customers. The pre-paid base grew by 7.2% to 15.3 million.
"We extended our network footprint, using the newly acquired spectrum to enhance LTE coverage and launch 5G services," says Taukobong. "This benefited the mobile broadband subscriber base, which grew 9.2% to 11.6 million currently, 63.7% of our total mobile base uses wireless broadband."
BCX maintained stable revenue levels at R14 252 million driven by 9.1% growth in the IT business.
Telkom's masts and towers business, Swiftnet, saw marginal revenue growth of 0.9% to R1 304 million as they constructed additional towers and new in-building coverage solutions (IBS) sites over the period. Modernisation by mobile network operators (MNOs), new base station and 5G deployment resulted in a 10.3% increase in revenue from continuing customers.
"Swiftnet successfully tested the technical capability of its power-as-a-service (PaaS) solution," Taukobong continues.
"This will help curb the impact of loadshedding in our operations and enable us to offer PaaS solutions as a value-added commercial offering making alternative power available to customers struggling with power outages."
Group EBITDA at R9 552 million was down 19.8% with EBITDA margin contraction by 5.8 percentage points (ppts) to 22.1% mainly attributable to the impact of accelerated loadshedding and a 25.5% increase in our cost of handset and equipment - higher mobile handset sales of 14.8% and increase in IT hardware and software revenue of 65.8%. This excludes a R1 065 million provision for costs associated with the restructuring initiated in the last quarter of the financial year.
Normalised HEPS and BEPS earnings dropped by 76.6% to 134.6 cents and by 86.8% to 71.0 cents, respectively.
Technology evolution, market changes and economic factors adversely effected the Group resulting in an impairment of R13 billion (excluding tax effects), in two of the Group's Cash cash-generating units, Openserve and Telkom Consumer. The impairment is in line with the requirements of IAS 36 "Impairment of Assets"
The process for the disposal of Swiftnet is at an advanced stage with the decision on the offers received expected during the first half of the current financial year.
Telkom will undergo further restructuring to consolidate its core infrastructure assets to support its growth ambitions.
Following an approach from a consortium of Afrifund Investments, Axion and others for the potential acquisition of a controlling stake in Telkom, Telkom is assessing the offer in line with its duty to assess offers it receives.
"While we are committed to returning cash to shareholders in the medium term, the Board has resolved to postpone the dividend for another year, to first strengthen our cash position, as we navigate the cost transformation journey", concluded Taukobong.
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For more information contact: media@telkom.co.za