JOHANNESBURG- South Africa’s Telkom, hit by tough competition and burdensome costs from its new mobile arm, posted a one-third drop in full-year profit and suspended its dividend.
The biggest fixed-line phone operator in Africa said headline earnings per share fell to 324.7 cents in the year ended March from 484.8 cents a year earlier.
The company, whose top shareholder is the government, said it would suspend dividend payments from this year as it faces a cash shortfall.
Telkom’s recently-launched mobile unit has been struggling to keep up with bigger Johannesburg-based African mobile operators MTN and Vodacom.
The government recently turned down a $385 million offer for a 20 percent stake in the company from South Korea’s KT Corp. The cash injection from the deal would have helped the struggling firm in its plan to turn around, analysts have said.
The deal included an issue of new shares for KT, which would have reduced the government’s shareholding to below the 50 percent it holds jointly with a government-run pension scheme.
Telkom shares are down nearly 30 percent this year, compared with a 6 percent rise in the All-Share index.