‘Telkom does show the way for SOEs’

Re­sults vin­di­cate de­ci­sion not to pri­va­tise

The Star Early Edition - - COMPANIES - Di­neo Faku

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.

PHOTO: SIMPHIWE MBOKAZI

Telkom stand in Park­town. The com­pany’s for­tunes have im­proived quite dra­mat­i­cally, show­ing ro­bust fi­nan­cial re­sults.

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