Flatlining Telkom’s shares drop

Decrease in profit after tax to R3.158bn.

Telkom’s headline earnings per share fell by 18.4%, while operating revenue was flat in the year to March 31, the company said yesterday. The group recorded a 19.2% decrease in profit after tax to R3.158 billion, mainly attributable to an increase in the taxation expense and a 3.6% decrease on earnings before interest, taxation, depreciation and amortisation (Ebitda) of R10.544 billion.

This resulted in an 18.4% decrease in headline earnings per share to 597 cents.

“The year was characterised by a tough economic environment, political uncertainty and intense competition, as well as the consequent low business and consumer confidence,” group chief executive officer Sipho Maseko said.

“We felt the impact of the weak economic environment, as the private and public sectors respectively deferred and lowered their information communications and technology spend. This impacted Telkom’s performance.”

Telkom declared an ordinary dividend of 237 cents per share. This followed an interim dividend of 118 cents per share, taking the total for the financial year to 355 cents, compared with 422 cents in the year to March 2017.

Telkom is a semi-privatised telecommunications provider operating in more than 38 countries across the African continent. The SA government owns a 39% stake.

The company said it would continue to focus on a sustainable growth framework and would review its business portfolio and prioritise strategic initiatives.

Over the next three years to 2021, capital investment would be 16% to 20% of revenue. – ANA