Telkom CEO Sipho Maseko
Photo by: Dylan Slater
JSE-listed Telkom on Monday posted a 19.2% decline in profit after tax to R3.15-billion for the financial year ended March 31
The group attributed this mostly to a higher effective tax rate, which increased from 15.2% in 2017 to 26.4% in 2018 and a 3.6% decrease in earnings before interest, taxes, depreciation and amortisation (Ebitda) to R10.5-billion.
Headline earnings a share fell 18.4% to 597c apiece, while basic earnings a share decreased by 19.6% to 602.3c for the year under review.
Operating expenses increased by 2.6% owing to a 4% increase in employee expenses driven by an average salary increase of 6% and market-related salary adjustments.
“The year was characterised by a tough economic environment, political uncertainty and intense competition, as well as the consequent low business and consumer confidence.
“We felt the impact of the weak economic environment, as the private and public sectors respectively deferred and lowered their information communications and technology spend. This impacted on Telkom's performance, particularly in BCX, which serves the business sectors,” said Telkom CEO Sipho Maseko.
Group revenue for the year under review remained flat at R41-billion, supported by a 47.2% increase in mobile service revenue to R5.1-billion.
“Our mobile business is now a key driver of growth in the group, offsetting the decline in BCX and Openserve,” he explained.
Telkom invested R7.9-billion in capital expenditure during the 2018 financial year.
Telkom’s free cash flow increased 465.7% to R501-million in 2018.
The company declared a dividend of 355c a share, a decline of 16.3% year-on-year.