09 March 2021
South Africa’s Telkom said service revenue from mobile soared 40.7% year-on-year for the nine months to end-December 2020.
This helped group revenue rise slightly by 0.9% to R32.4bn. However, this was against a shocking 26.2% decline in year-to-date fixed voice and interconnection revenue.
Ebitda climbed by 8.5% year on year to R8.6-billion thanks to “sustainable cost management” measures. Elsewhere, capital expenditure was down from R5.5bn to R5.1bn. However, there was an acceleration in the third quarter of the financial year.
Overall, Telkom liquidity remained “healthy”, with a “stable balance sheet”. In the first nine months, Telkom generated free cash flow of R1.6-billion, up from R211-million reported in the first half of the 2021 financial year. Excluding the year-to-date costs associated with retrenchments and early retirement packages amounting to almost R1.3-billion, Telkom generated free cash flow, year to date, of R2.8-billion.
“The group delivered a solid set of results where growth was challenging due to Covid-19 and the strained South African economy,” said Telkom chief executive officer Sipho Maseko. “This was driven by robust mobile growth, solid sustainable cost management and strong free cash flow generation.”
Talking about cost management, Maseko said Telkom’s broadband-led strategy and the decision to invest in infrastructure ahead of demand enabled it to meet the surge in demand for broadband services. “These results also reflect the success of our financial strategic objectives, which include building financial resilience through sustainable cost management, cash preservation and disciplined capital allocation as we weather the impact of Covid-19 in our businesses,” he added.