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Telkom CEO: “2010 tough with muted revenue growth”

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Telkom Group CEO Reuben September

In its end of year results, Telkom recorded R7.03 billion revenue against R36.8billion for March.

Telkom Group Chief Executive Officer, Reuben September, described his company’s 2010 financial year as being “tough with muted revenue growth”.

In total, Telkom recorded a 92% decline in full-year profits.

“Our strategy seeking to re-position the Telkom Group is imperative given the tough operating environment.

“Similar to the strategies of other leading operators in the world, we are focusing on growing other revenue streams – data centre operation, mobile and Africa – to compensate for the decline in fixed voice revenues,” said September.

According to financial year results in possession of, Telkom has diluted headline earnings per share, which decreased from 600.8 cents to 46.8 cents.

The telecommunications company says it attributed the decline to higher operational costs at home and tough competition at its Nigerian unit.

“We are improving our execution in current growth markets, such as broadband and wholesale, and are taking actions to defend our consumer and enterprise markets,” said September.

He said the 50% share of Vodacom’s results in the 2009 financial year and Telkom Media’s results were disclosed as discontinued operations in the Telkom Group’s consolidated financial statements.

“Vodacom transaction accounts for profit of R40.5 billion. Impairment of Multi-Links goodwill of R2,148 million and assets of R3,012 million.

“Normalised operating revenue up 0.7% to R37.0 billion. Capital expenditure reduced by 44.2% to R5.4 billion. Normalised free cash flow of R5.5 billion,” said September.

He also outlined other ventures the giant telecommunications company has embarked on saying these would boost Telkom’s expansion programmes intended to generate more income.

He highlighted that Telkom has a roaming agreement with MTN, which covers services such as voice, 2G and 3G data, MMS and USSD on a national basis.

September also explained Telkom’s decision to continue investing in the Multi-Links network and operations in Nigeria, in order to complete capital projects and ensure that the asset is properly structured for future viability.

“Accordingly, Multi-Links was recapitalised with preference share capital in order to enable the company to repay existing debt and negotiate third party financing,” stated September.

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