‘Telkom does show the way for SOEs’
Results vindicate decision not to privatise
TELECOMMUNICATIONS and Postal Services Minister, Siyabonga Cwele yesterday said that Telkom’s robust financial results in the financial year to March affirmed the government’s decision not to fully privatise the company, despite calls by opposition parties for it to do so.
Telkom rallied on the JSE yesterday to close 5.32 percent higher at R80.03 a share following the record dividend of R4.22 a share in the year ended March, which was 56.3 percent higher than R2.70 a share declared last year.
Telkom, in which the government, has a 39.8 percent stake posted a 38.4 percent growth in service revenue and net income with interest, taxes, depreciation and amortisation (Ebitda) of R660 million after four years of recording Ebitda losses. It attributed the result to an expansion in its network, the extension of its distribution channels and the launch of innovative products.
Cwele said that Telkom’s results underscored the correctness of government’s decision, working with other shareholders, to invest in turning around the company instead of selling it. He noted that Telkom had also invested R8.7 billion in fibre, mobile business and its network in rural areas.
“Since the cabinet decision of June 2012, shareholders reconstituted the board, which appointed a new management team. These changes have seen the company’s share price moving from a low of R12.50 to the recent R77.64. We encourage state owned companies that are in trouble to learn from Telkom how it achieved its turnaround,” Cwele said.
“It is crucial that we make the cost of data and communication to be more affordable to ensure that more people meaningfully participate in a shared economic growth,” Cwele said.
Sipho Maseko, Telkom chief executive, said: “We will continue to seek a sustainable growth framework for the group. We intend to invest in a manner that enhances our financial sustainability to continue creating a platform for growth.”
Other highlights in the results were the strong revenue growth was boosted by BCX and the mobile business was among the highlights in the financial results. Operating revenue grew 9.8 percent to R41bn, boosted by the full consolidation of BCX in the year, along with the solid performance of the mobile business.