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- Telkom's share price took a big hit after the company issued a tepid forecast for future revenue and profit growth, due in part to a slowdown in growth in its mobile business.
- Its revenue declined by 1% over the past year, as its fixed-line business continues to decline.
- Its mobile business now has almost 17 million active subscribers.
Telkom's share price slumped by more than 7% on Tuesday morning after the company issued a tepid forecast for future revenue and profit growth.
Due to a slowdown in growth in its mobile business and the continuous decline of its fixed-line business, the company now expects revenue growth of mid-single digits over the medium term, while its earnings before interest, taxes, depreciation, and amortisation (Ebitda) will also grow by mid-single digits.
For the year to end-March, Telkom's revenue came under pressure, dipping 1% to R42.7 billion, while headline earnings per share increased by 2.5%.
The company's legacy fixed-line business continues to face a decline, while mobile still showed growth despite stiff competition in the sector.
Its mobile business saw a 6% increase in revenue to R21.4 billion in the year to end-March, driven by growth in the customer base and increased data use. Its active subscriber base increased by 10.5% to 16.9 million.
Telkom's prepaid customer base grew by 12% to 14.3 million, despite "an intensely competitive landscape and challenging economic environment".
The average revenue per unit (ARPU), for pre-paid customers was R66, while post paid customer ARPI is R212. ARPU refers to the profitability of a service based on the amount of money that is generated from each user.
Telkom is accelerating its strategy of increasing its fibre to the home footprint and CEO Serame Taukobong said in the second half of the year, overall fixed broadband subscribers increased for the first time in several years despite a decline in ADSL subscribers.
Mobile broadband customers reached 10.7 million.
BCX, the group's ICT subsidiary, has been hit by the global supply chain constraints and shortages of semiconductor chips.
But its masts and tower business, Swiftnet, increased revenue by 4.4% to R1.2 billion.
Telkom is in the second year of its three-year dividend suspension period. Dividends are expected to the reinstated at the end of 2023 financial year.
In early trading on Tuesday, its share price was down 7.4% to R37.25. It has lost more than 30% this year.
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