JOHANNESBURG — Fixed-line operator Telkom reported a 36% drop in first-half profit yesterday, as the former state-run utility continues to struggle with tough competition and burdensome costs from its new mobile arm.
Telkom, which is in talks to sell a 20% stake to South Korea’s KT Corporation, said headline earnings from continuing operations totalled 191,7 cents per share in the six months to end-September, compared with a restated 297c a year earlier.
Including discontinued operations, headline earnings fell by nearly 84%.
Operating revenue totalled R16,4 billion, down 3,2% from a year earlier, the company said.
It said it expects capital spending to total as much as 20% of revenue for the year.
Telkom, which is nearly 40% owned by the South Africa’s government, has been fighting to rein in costs and return to growth, hit by the decline in traditional telephony and a costly failed expansion plan in Nigeria.
It is focusing on its new mobile unit, as a part of plan to become a fully “converged” telecom operator, offering mobile, fixed-line, broadband and wireless Internet.
It finalised the sale of its Nigerian unit in October, for a net loss of R1 billion. That loss is due to be booked in the second half of the financial year.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Telkom also said in October it was in talks to sell a 20% stake to South Korea’s second-largest mobile operator, KT Corporation for around $600m.
Shares of Telkom are down nearly 22% so far this year, compared with a 1% decline in Johannesburg’s All Share index.
