ALL HANDS ON DECK
Telkom’s chief executive Sipho Maseko says the fixed-line operator focuses on business
THE GOVERNMENT has yet to begin discussions with Telkom regarding the Treasury’s mooted plan to raise cash to plug funding gaps in embattled power utility Eskom.
Telkom and Vodacom are among several entities in which the government is expected to consider selling stakes to stabilise Eskom funding.
Telkom chief executive Sipho Maseko said yesterday that Telkom had had “no discussions with government up until this point”.
He said the focus was on running the business and positioning it for the future.
“You can never really choose who your parents are. Shareholders will do what they do. People buy our stock and sell our stock. We are focused on running the business,” he told Business Report as the company announced its financial results for the six months to September.
Net revenue rose 1.6 percent to R13.3 billion, while headline earnings a share rose 14.9 percent to 261.7 cents a share. Earnings before interest, tax, depreciation and amortisation climbed 12.1 percent to R4.4bn, and operating expenses dropped 2.4 percent to R9.2bn. The figures exclude the effect of staff severance expenses and a gain realised in the same period a year earlier.
Fixed-line voice and interconnection revenues remained under pressure, falling 11 percent to R4.3bn, while mobile revenue rose 55 percent to R1.4bn. Free cash flow was at R1.7bn, while net debt fell 74.1 percent from March to R545 million.
“Our results for the first six months of the 2015 financial year confirm that the business is on track for future growth. Our multi-year turnaround strategy, which began in 2013, is paying off,” Maseko said. “We expect that this positive momentum will continue for the remainder of the financial year.”
Maseko said the company had instituted a multi-year cost efficiency programme, which included the optimisation of the deployment of its technical vehicle fleet. “It is important that we remain focused and disciplined in how we allocate capital,” he said.
He said the consumer was facing headwinds that translated, for example, into customers wanting more minutes for less. Even so, Telkom was pushing ahead with new offerings to provide better value for customers, he added.
Telkom shares closed down 1.64 percent at R62.95, pausing after a recent run-up that has made the stock the best performer on the all share index.