Telkom final results March 2019

Revenue rose to R41.774 billion (R39.661 billion) whilst EBITDA increased to R10.581 billion (R10.422 billion). Operating profit decreased to R4.767 billion (R4.837 billion). Profit attributable to owners declined to R2.795 billion (R2.917 billion). In addition, headline earnings per share grew to 619.2 cents per share (589.3 cents per share).

Declaration of dividend
In line with our dividend policy, the board declared a final ordinary dividend number 24 of 249.40317 cents per share. This follows an interim dividend of 112.14144 cents per share declared in the interim results. This takes the annual dividend for FY2019 to 361.54461 cents per share (FY2018: 355.08846 cents per share).

The group ended the year with a solid performance despite the pressures from the regulatory landscape, a weak economic environment, a decline in fixed voice revenue and customers migrating to next-generation technologies at lower margins. Looking forward, we expect to accelerate the migration of customers to next-generation technologies in line with our strategy focusing on retaining customers. It is imperative to continue investing in key growth areas in line with our strategy to ensure that we win against our peers.

The capex investment to date is already yielding positive results with the growth in our new generation revenue streams driving growth for the group. We expect the trends to continue with new revenue streams driving growth for the group. We will continue to manage the decline in traditional revenue by proactively migrating customers from traditional to new generation revenue and partnering with over-the-top players to provide data-led propositions to our customers.

To support the migration strategy, we intend to accelerate our investment in our network for coverage and capacity and continue to utilise our LTE coverage (4G) spectrum efficiently, as the bulk of the traffic is on our 4G network. During the year, we entered into a roaming agreement and facilities leasing agreement that will further strengthen our ability to accelerate the network deployment. The new roaming agreement will provide us with deep passive sharing, seamless roaming, access to 4G and enhanced high value location coverage. This will enable us to provide improved customer experience and allow us to extend our coverage footprint. Our focus is to retain customers as customers become technology agnostic.

We are mindful of the migration from traditional to new revenue streams at lower margins with increased cost to serve. As a result, we are embarking on a structured and focused sustainable cost management program to rebase the cost structure to improve absolute EBITDA growth and ensure that we are sustainable on a long-term basis.

We are renewing our capital framework to ensure that we apply a disciplined approach to how we allocate the various sources of capital, taking into account our continued investment strategy, return to shareholders, while maintaining a healthy balance sheet.

Capital Markets Day
Telkom will host a Capital Markets Day on 29 May 2019. A webcast link with live streaming and all presentations of the day will be made available on the website at at 08h00 (South African standard time).

2019-05-27 09:02:08